ZIM Integrated Shipping Services reported a net profit in the second quarter of 2019 of $5.1 million, compared to a $33.2 million net loss in the second quarter of 2018.
Eli Glickman, the president and chief executive officer of the Israel-based carrier, said, “ZIM’s results for the first six months of 2019 are encouraging. We can now clearly see the benefits of our long-term strategy, specifically the operational cooperation with the 2M Alliance, recently expanded to a fourth trade.”
Adjusted earnings before interest and taxes (EBIT) in the second quarter were $38.7 million in the second quarter this year, compared to a negative adjusted EBIT of $3.1 million in the second quarter of 2018.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) were $94.4 million in the second quarter of 2019, compared to $24.3 million in the second quarter of 2018.
ZIM cautioned, however, that the comparability of results this year and last year is limited because as of Jan. 1, it is applying the IFRS 16 accounting standard for leases. That results “in a reduction in the company’s lease expenses, along with an increase in its depreciation expenses and interest expenses.” In addition, this year the company “includes its share of profit of associates as part of its results from operating activities (EBIT).”
Total revenues in the second quarter of 2019 were $834.3 million, reflecting an increase of 3.9% over the $803.2 million recorded in the second quarter of 2018.
ZIM carried 731,000 TEUs in the second quarter. That was 5.3% less than in the second quarter of 2018, when the company had an all-time record of 772,000 TEUs, but it was still the second-best quarter ever for ZIM.
Glickman said, “In addition to the positive bottom line delivered this quarter, ZIM recorded a meaningful improvement in all parameters and continues to be a top performer in the shipping industry in terms of adjusted EBIT margin.”
He said the company “will double down on our efforts to strengthen our competitive position by growing with our partners, upgrading our customer service, while driving relentless cost management and striving for commercial and business excellence. This is all the more relevant in light of the uncertainties lying ahead for the industry, mainly the USA-related trade restrictions and the upcoming implementation of the IMO 2020 regulation.”
In September 2018, Zim began sharing space with the 2M Alliance of Maersk and Mediterranean Shipping Company on services between ports in Asia and the U.S. East Coast. During the first quarter of this year, that cooperation was expanded on routes connecting Asia with ports in the East Mediterranean, as well as Asia and the Pacific Northwest — Seattle/Tacoma, and the British Columbia ports of Vancouver and Prince Rupert.
This month ZIM and the 2M Alliance began cooperating on services between Asia and ports on the U.S. Gulf — Houston, Mobile and Tampa — as well as Miami.
Kenon Holdings (NYSE:KEN) has a 32 percent stake in ZIM.