Israeli container shipping company ZIM Integrated Shipping Services Ltd. has sunk to the red in the first quarter of 2016 after staying in the black for almost a year.
The company posted a net loss of USD56 million, compared to net income of USD12 million for the first quarter of 2015 amid historically low freight rates.
The average freight rate per TEU carried was USD943 in the first quarter of 2016, reflecting a 25% decrease compared to the respective period last year.
As a result of significantly lower freight rates, the company’s total revenues in the quarter decreased by 20% to USD630 million, compared with USD792 million in the same period last year.
ZIM recorded an adjusted EBITDA margin of 1.3% and an adjusted EBIT margin of negative 2.6%. This compares to an adjusted EBITDA margin of 10.7% and an adjusted EBIT margin of 7.7% in the first quarter of 2015.
“The very challenging market situation impacts the industry as a whole. ZIM continues to make progress with its extensive cost-cutting and efficiency projects, along with investment in customer service excellence, as evident in a recent first place ranking awarded to ZIM in a schedule reliability report. Our asset-light business model facilitates a highly flexible and cost-efficient fleet management, which, together with our pro-active optimization and rationalization of the company’s line network, proves crucial in the current market environment,” Rafi Danieli, ZIM’s President and CEO, said.
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