Israel-based Zim Integrated Shipping Services Ltd. reported a loss of US$74 million in the second quarter of 2016 from a $23 million profit in the same period of 2015, as it struggled against “unprecedented low freight rates and severe market conditions.”
It reported an adjusted EBITDA of negative $15.9 million in the second quarter of 2016 compared to a positive $74.2 million for the second quarter of 2015. Adjusted EBIT was negative $40.5 million for the three-month period ended June 30, 2016 compared to a positive $49.8 million for the second quarter of 2015, the carrier said in a statement.
Operating cash flow was positive at $17.6 million, compared to positive $86.0 million for the second quarter of 2015,
The first half of 2016 was characterized by historically low freight rates. The average freight rate per TEU carried was $903 in the first half of 2016, reflecting a 24.8% decrease compared to the respective period last year. As a result, total revenues in the quarter decreased by 19.8% to $611.8 million, compared with $762.9 million in the same period last year.
Rafi Danieli, Zim president and CEO, said: “The very challenging market situation impacts the industry as a whole. Our strategic business plan, focusing on select markets where the company has a competitive advantage, is keeping Zim in the top of the industry in terms of EBIT margins. The company keeps investing in customer service excellence and on-time delivery to our customers, as evident in a recent first place ranking awarded to Zim in a schedule reliability performance report. We have increased our carried TEU in Q2 over Q1 by about 7%, which shows the trust of our customers in the company. Our fast reaction to market changes, and cost efficiency programs, aims at allowing Zim to cope with the challenges faced by the industry.”
Zim carried 617,000 TEUs in the second quarter of 2016, a 6.9% increase compared to the first quarter of 2016, which is above market average growth for same period, the company said.
The carrier said it has reached an agreement with its creditors for rescheduling of payments totaling about $115 million for a period of up to 12 months starting on September 30, 2016.
“With this agreement in place the company maintains its financial stability and will continue to develop its growth plan,” it said.
Zim is the biggest container shipping company in Israel and one of the top 20 global carriers. Headquartered in Haifa, the company operates 80 vessels that call at 180 points across the world, with 10 strategically located hubs.
