Zim has cut its first quarter loss by 45% to $62 million as it awaits approval of its substantial restructuring proposal.
The Israeli box line recorded an EBIT loss of $8 million in the period, improving on Q1 2013’s $47 million operating loss. The company suffered from a continued pressure on box rates, as revenues fell 5% to $867 million despite volumes carried rising 2% to 617,000 TEU. The average rate per TEU was down to $1213, a 5% decrease compared to the same quarter 2013.
Zim has finalised the terms of a $3 billion restructuring programme which will reduce debts, inject equity and position the line to better compete in the market if the plan is granted approval by creditors and the Israel Corporation.
Avi Nissenkorn, head of Israel’s Trade Union Organization has agreed to head negotiations between Zim employees’ representatives and the company’s management. The negotiations are an attempt to adjust agreements put in place when Zim was a state-owned company, with a view to making the outfit able to compete in the container shipping business.
Zim CEO Rafi Danieli said: “Zim employees must take their share of responsibility for the company’s future and join in the effort to successfully complete the restructuring. Their cooperation is vital to ensure that the company can benefit from the restructuring and move ahead as the “New Zim”. We believe that the new structure and strategy will benefit the employees in the long run. With a dramatically improved balance sheet and cost structure, and the support of a committed workforce, the company is poised for a dramatic improvement in profitability over the coming years.”
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