ZIM reported revenues for the quarter ended June 30 of $976 million, reflecting an increase of 6 per cent compared with the previous quarter. While average freight rates per TEU declined by 3 per cent compared to the previous quarter, growth in revenues was achieved due to a 5 per cent increase in volume of carried TEUs, to 631,000.
ZIM’s operational loss amounted to $5 million (excluding one-time cost of $24 million related to early employee retirements) compared with an operational loss of $47 million in the previous quarter – representing a $42 million improvement. ZIM recorded a net loss during the quarter of $72 million loss (excluding one-time costs of $24 million) compared with a loss of $110 million – representing a $38 million improvement.
Operating cash flow in Q2 amounted to $5 million, compared with a negative operating cash flow of $28 million in the first quarter, representing a $33 million improvement.
The positive results were recorded in spite of slow market conditions which remain challenging as newbuilds continue to enter the market, thus preserving a supply surplus and creating downwards pressure on freight rates. In order to meet these challenges, ZIM continues to implement internal efficiency measures and at the same time continues to negotiate with its creditors aimed at achieving a long-term solution for its capital and debt structure, and creating a stable and sound base to allow the company to remain competitive in the future.
As a part of the company’s efficiency plan, ZIM has reached an agreement with the company’s employees’ union and the General Federation of Labor (Histadrut) over early retirement of 100 of the company’s employees.
With the continuing support of its creditors, including vessel and container lenders, shipowners, shipyards, unsecured lenders and bond holders, ZIM continues to seek a comprehensive solution to the capital and debt structure to bring financial stability in the face of the multiple challenges and volatile market conditions. These negotiations are made possible thanks to the continued trust of all creditors which have agreed to further adjustments and concessions. Lenders agreed to waive some of the financial covenants during the negotiations, and also to delay, to Q3/2015, payment of deferred amounts that were due to be paid at year-end of 2014. Shipowners agreed to continue to receive reduced amounts until the end of the year, and agreed to postpone other repayments to Q3/2015.
ZIM’s operational results are comparable to industry averages, which demonstrates the considerable improvement in its performance and improvement in its competitive position. The company continues to implement efficiency improvements to improve future results.