The Israeli ocean carrier reported a $28 million loss in the fourth quarter, much larger than the $7 million loss in the fourth quarter of 2014 despite year-over-year volume growth during the same period.
ZIM Integrated Shipping Services posted a profit of $7 million in 2015, compared to net loss $198 million in 2014.
Revenues for the full year decreased 12 percent, from $3.4 billion in 2014 to $3 billion this past year.
In the fourth quarter of 2015, the Israel-based container carrier reported a loss of $28 million compared with a loss of $7 million in the fourth quarter of 2014. Revenues for the fourth quarter of 2015 stood at $687 million, 15 percent less than the $813 million recorded in the same period last year.
ZIM carried about 590,000 TEUs in the fourth quarter and a total of 2.3 million TEUs for the full year in 2015, year-over-year increases of 5 percent and 2 percent, respectively, compared to the same 2014 period. Container volumes were negatively affected by lower global demand in 2015, offset by the positive contribution of the new Z7S service that the Company launched earlier in the year.
“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 ZIM. “Global capacity increased in 2015 by an historical amount of 1.7 million TEUs, or about 8.5 percent, and resulted in a sharp drop in freight rates, pushing the Shanghai Containerized Freight Index (SCFI) to all-time lows.”
“While the idle fleet reached a peak of about 8% of global capacity, market challenges remain as the order book at the end of 2015 stood at 4 million TEUs, out of which 1.3 million TEUs are expected to be delivered during 2016,” the carrier added.
Rafi Danieli, ZIM’s chief executive and president said, “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. 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.”
The company announced in January that Danieli, who has served as CEO for seven of his 38 years working for ZIM, was resigning from his current post, but would continue to serve as CEO during the search for a replacement. The announcement came shortly after reports from the Israeli newspaper Haaretz that ZIM would delay its planned initial public offering on the New York Stock Exchanges.
ZIM said the fourth quarter of 2015 was characterized by a continued deterioration of the market environment and historically low freight rates. The company’s average freight rate per TEU carried stood at $988 in the fourth quarter and $1,126 for the year in 2015, reflecting decreases of 21 percent and 9 percent, respectively, compared to 2014 figures.
ZIM posts $7m profit in 2015
