Zim’s profits soar 269%

Zim’s profits soar 269%    Zim Integrated Shipping Services Ltd. boosted its net earnings 269 percent to $172 million in 2004, from $47 million in 2003, as the Haifa-based shipping line increased its box volumes and freight rates.
   In the fourth quarter, Zim reported earnings of $57 million, about three times the $18 million profit it made in the same quarter of 2003.
   As one of the last international container carriers to report its 2004 results, Zim followed the general industry pattern of substantially improved profits and strong revenue growth for 2004.
   Its revenue from shipping and related activities jumped 24 percent to $2.5 billion in 2004, from $2 billion in 2003. “The increase in the sales turnover stems mainly from a 10 percent increase in the quantities shipped along with an 11 percent increase in the average price per container shipped,” said Israel Corp., parent company of Zim.
   Zim’s operating profit rose 78 percent to $176 million last year, from $99 million in 2003, despite rising fuel and ship charter costs. These figures translate into a 2004 operating profit margin of 7 percent as a percentage of revenue, up from 4.9 percent in 2003.
   In 2004, Zim sold four container ships for $142 million, a transaction that produced an after-tax capital gain of $42 million.
   The shipping line also reported that it suffered a loss of revenue last year because of a strike by workers at Israel’s seaports. Problems were caused with respect to the schedules for arrivals and departures of the ships Zim operated and a shortage of containers in various locations was created.
   “As a result, there was an adverse effect on the regular service to customers worldwide,” Israel Corp. said. “A small part of the additional expenses incurred due to the strike was collected from Zim’s customers.”
   Zim is now 98 percent owned by Israel Corp., a conglomerate of fertilizer, energy and shipping businesses controlled by the Offer brothers and Bank Leumi Le-Israel. In February 2004, the conglomerate acquired the Israeli state’s 49-percent stake in Zim for NIS518 million ($119 million).
   The latest financial results show Israel Corp. made a sound move by increasing its share in the shipping line. In 2004, Zim’s cash flow from operating activities rose to $248 million, from $148 million in 2003.
   In December, Israel Corp. approved a plan for Zim to order 12 containerships, comprising eight 4,250-TEU vessels and four ships of 6,350 TEUs capacities.