ZIM shrinks operating loss in 2013

   The liner carrier ZIM said last week it suffered an operating loss of $191 million net loss in 2013, an improvement on the $206 million it lost in 2012.
   Excluding extraordinary expenses, the annual operational loss was $130 million, with ZIM attributing the improvement to the implementation of technological innovations, which resulted in reduced fuel consumption and fuel procurement at optimal prices.
   The line’s net loss was $530 million in 2013, compared to a $428 million loss in 2012. Excluding extraordinary expenses, ZIM said its annual loss amounted to $369 million.
   ZIM’s revenue fell 7 percent year-over-year, to $3.7 billion, “resulting mostly from the decline in freight rates,” the line said, despite container volume rising 5 percent, to 2.5 million TEUs.
   ZIM’s average freight rate in 2013 decreased by 9 percent (from $1,342 per container in 2012 to $1,227 in 2012).
   “In January 2014 the company signed a term sheet with a majority of its debtors, and continues to make progress towards the completion of the financial arrangement, reflecting the long-term trust and support of the debtors in the company,” ZIM said in a statement. “The new financial arrangement will significantly reduce the company’s debt to a level of $1 billion to $1.5 billion and improve its expenses’ structure (mainly through reduced interest payments and vessel-leasing costs). It will enable the company to face the many challenges of the shipping market in the best possible way.”
   Meanwhile, ZIM said it is in “advanced stages of negotiations with the Israeli government” regarding the cancellation of the state’s so-called “golden share,” while maintaining the state’s interests in a way accepted by Israel’s Ministry of Defense. The change, ZIM said, “will ease the completion of the financial arrangement, enable cooperation with other carriers and facilitate raising capital. Recently, the employees’ representatives in Israel and the marine officers’ union declared a labor dispute related to the company’s efforts in relation to the cancellation of the ‘golden share’ and adjustments of the collective labor agreement to suit the company’s condition and the difficult competition in the global shipping business owing to the ongoing crisis.”
   ZIM has suffered operational losses in each of the past three years, and five of the last six, according to American Shipper financial research.