ZIM Integrated Services’s fourth quarter of 2015 was characterized by a continued deterioration of the market environment and historically low freight rates. The average freight rate per TEU carried was $988 in the fourth quarter of 2015 and $1,126 for the year, reflecting a 21 per cent and 9 per cent decrease compared to the respective periods last year. As a result of significantly lower freight rates, total revenues in the quarter decreased 15 per cent to $687 million, compared with $813 million in the same period last year. Revenues for the full year decreased 12 per cent to $2,991 million, compared with $3,409 million in the same period last year.
ZIM achieved an adjusted EBIT margin for the year of 3.9 per cent and an adjusted EBITDA margin of 7.2 per cent, compared to an adjusted EBIT margin of negative 0.3 per cent and an adjusted EBITDA margin of 3.4 per cent in 2014. For the year, net income of $7 million was reported, compared to a net loss of $198 million for 2014. Operating cash flow of $173 million was reported for 2015, compared to $121 million for 2014. ZIM carried 2.3 million TEUs in 2015, reflecting a 2 per cent decrease compared to 2014.
For the quarter ended December 31, 2015, ZIM produced a net loss of $28 million, compared to net loss of $7 million for the fourth quarter of 2014. Operating cash flow was $17 million, compared to $43 million for the fourth quarter of 2014.
The Company’s improvement in margins in 2015 was achieved against a backdrop of challenging market conditions, highlighted by vessel overcapacity and extremely low freight rates. Global capacity increased in 2015 by an historical amount of 1.7 million TEUs, or about 8.5 per cent, 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 per cent of global capacity, market challenges remain as the order book at the end of 2015 stood at 4M TEUs, out of which 1.3M TEUs are expected to be delivered during 2016.
Rafi Danieli, the company’s President and CEO, 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.”