ZIM returned on profit in 2015

ZIM vesselThe shipping operator ZIM returned on profit in 2015 on the background of falling freight rates and revenues. The The Israeli company reported 7 million USD profit, despite the loss in fourth quarter of the last year. The adjusted EBIT amounted to 118 million USD, mostly because of the applied cost reduction programs and low bunker prices. The company revenues dropped by 12% yoy to 2.99 billion USD due to the record low freight rates, which reduced average by 9% to 1126 USD per TEU. The container turnover of ZIM also had negative trend, decreasing by 2% and amounted to 2.3 billion TEU.

The cargo turnover decrease was driven by decrease in income from containerized cargo of 334.7 million USD, decrease in income from related services of 43.5 million USD and decrease in demurrage in an amount of 28.9 million USD.

“Strong improvement in margins in 2015 was achieved against a backdrop of challenging market conditions, highlighted by vessel overcapacity and extremely low freight rates”, said the company in official statement. “Global capacity increased in 2015 by an historical amount of 1.7 million TEU, or about 8.5%, and resulted in a sharp drop in freight rates, pushing the Shanghai Containerized Freight Index (SCFI) to all-time lows”, added the company.

ZIM shipZIM’s revenues in fourth quarter of 2015 decreased by 15% to 687 million USD, as the world shipping suffered from overcapacity and rapidly falling freight rates. The Traffic volumes for the quarter increased by 5% to 590 thousand TEU, while average freight rate for the period fell to 988 USD per TEU.

“The comprehensive structural, operational and organizational changes we have implemented in recent years enabled us to achieve operating margins ranked among the top in the industry, despite continued overcapacity and freight rate deterioration”, said ZIM’s CEO, Rafi Danieli. “In the current market environment, our asset-light business model enables ZIM to benefit from highly flexible and cost-efficient fleet management. We continue to implement our business plan, focusing on select markets where the Company has a competitive advantage”, added he.

ZIM is the largest Israeli shipping company, managing more than 80 vessels and having total capacity for 540,000 TEU. The company is one of the leading shipping operators in the world, having about 8% from the world global container fleet.