Israel-based Zim Integrated Shipping Services announced a net profit of US$11 million for 2017 after registering a net loss of $163 million in 2016, attributing the turnaround to its restructuring while voicing concern over the continued overcapacity in the market.
Zim said its adjusted net profit for 2017 reached $50 million compared to an adjusted net loss of $150 million in 2016.
Said Eli Glickman, Zim’s president and CEO: “I’m proud to say that Zim’s financial results position us at the very top of the shipping industry. Zim is undergoing a profound process of change and improvement in all aspects of its activity, as is evident from its 2017 results.”
He added that the company is focused on introducing innovative digital solutions “that will enable us to cater for changing market needs swiftly and efficiently.”
Zim will also continue with its efforts to improve reliability and customer service as well as reduce costs in order to achieve profitability.
However, Glickman acknowledged that the long-term overcapacity in the market and rising bunker rates “continue to burden the industry as a whole.”
During 2016-2017, the container shipping industry went through a structural change as a result of the extensive activity of mergers and acquisitions that also led to reorganization of the global alliances.
“Since Q3 2016 we have been witnessing a positive trend in the industry with improved freight rates. However, the overcapacity still exists in the market and market conditions, on the whole, remained volatile, as freight rates partially decreased towards the end of 2017,” Glickman noted.
In 2017, Zim’s total revenues amounted to $2.978 billion, a 17% increase from $2.539 billion in 2016.
EBITDA (earnings before interest, taxes, depreciation and amortization) was $246 million, a reversal from the negative $50 million recorded the preceding year, while EBIT last year was $135 million compared to negative $52 million in 2016.
Volume carried was up 8% in 2017 to 2.629 million TEUs compared to 2.429 million TEUs lifted in 2016.
The average freight rate per TEU rose to $995 last year compared to $902 in 2016 for a 10% increase.
In the fourth quarter of 2017, Zim reported an adjusted EBITDA of $53 million as against $44 million in the same quarter of 2016, with an adjusted EBITDA margin of 7%.
Carried quantities increased by 12% to 685,000 TEUs in Q4 2017, compared to 613,000 TEUs in the same period of 2016.
