Zim posts US$16 million quarterly loss as revenue falls 21pc to $630 million


ISRAELI flag carrier Zim Integrated Shipping Services posted a quarterly loss of US$16 million, after last year's $85 million first quarter profit. This year's result was drawn on revenues of $630 million, which fell 21 per cent year on year.

Nonetheless, the company said Zim maintained its competitive position, in terms of operating profit vis-a-vis the industry, as the company incurred a lower year-on-year decline in freight rates and higher growth against the industry as a whole. 

The company said it did this in a deteriorating market, characterised by worsening overcapacity and slower growth of demand resulting in historic low freight rates. 

The Shanghai Containerised Freight Index (SCFI) reached the levels of 400 points during the first quarter, compared to an average of 989 points in Q1 of 2015.

This marked a new low, while idled fleet continued to increase, topping 1.5 million TEU, all the while significant changes in the industry, including mergers and acquisitions and restructuring of global alliances, added volatility and uncertainty. 

Said Zim CEO Rafi Danieli: "Zim continues to make progress with its extensive cost-cutting and efficiency projects, along with investment in customer service excellence."

Mr Danieli cited the recent first place ranking awarded to Zim in a schedule reliability report, as an example of success in this area. 

"Our asset-light business model facilitates a highly flexible and cost-efficient fleet management, which, together with our pro-active optimisation and rationalisation of the company's line network, proves crucial in the current market environment," he said. 

The first quarter was characterised by historically low freight rates. The average freight rate per TEU carried was $943 in the first quarter of 2016, reflecting a 25 per cent decrease compared to the respective period last year. 

Source: Schednet

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