Following completion of the company’s debt restructuring on July 16, 2014, ZIM reported improved results for the third quarter ending September 30. The $3.4 billion debt restructuring, which included a debt to equity swap of $1.4 billion, significantly improved the Company’s financial strength and restored a positive net worth.
Revenues for the quarter were $854 million, compared to $875 million in the previous quarter and $900 million in the corresponding quarter last year. Average freight rate per TEU was $1,281, an increase of $75 per TEU (6 per cent) compared to the freight rate in the previous quarter, and an increase of $79 per TEU (7 per cent) compared to the corresponding quarter last year.
On a GAAP basis, the Company had a negative EBITDA of $97 million in the third quarter compared to $29 million profit in the second quarter of 2014 and $56 million profit in the corresponding quarter last year. On a GAAP basis, the net loss incurred during the third quarter of 2014 was $63 million, compared to a $68 million loss in the second quarter and $42 million loss in the corresponding quarter last year. Operating cash flow in the third quarter was $37 million, an improvement of $18 million compared to the previous quarter and an improvement of about $22 million compared to the corresponding quarter last year.
The company carried 557,000 TEUs during the quarter, reflecting a 10 per cent decrease compared to the previous quarter and a decline of 13 per cent compared to the corresponding quarter in 2013. Most of the decrease was as a result of terminating service from Asia to Northern Europe as part of re-alignment of the business plan, which focuses on maintaining and enhancing profitable routes where the company offers added value to its customers, while improving and upgrading its points of interface with customers and continuing to improve its operational efficiency.
In spite of the reduction in revenues and volume of containers carried, ZIM managed to reduce the net loss and recorded an operating profit thanks to its continued efforts to drive efficiency, improving sales and service activities, combined with the benefits of lower fuel prices, reducing unprofitable routes, and increasing freight rates where necessary.