News / Restructured ZIM sails back into the black, but final quarter disappointed

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Israeli niche trades container line Zim recorded an adjusted net profit of $50m for 2017, following a loss of $150m in 2016 – but the carrier slipped back into the red in the final quarter.

Zim’s total revenue last year was up 17% on 2016 to $2.98bn, as it loaded 8% more containers on its ships to reach 2.6m teu.

Operating profit (ebitda) was $246m, versus a negative of $50m in 2016.

President and chief executive Eli Glickman said: “I’m proud to say that Zim’s financial results position is 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.”

Zim was restructured in 2014 in a deal which saw its lenders and the owners of its chartered ships take a 68% stake in the company in a $1.4bn debt-to-equity swap. At the same time, the carrier pulled out of loss-making services, including Asia to Europe, to focus on more lucrative routes such as Asia to the US east coast.

According to Alphaliner data, Zim is ranked the 13^th biggest container line, with a capacity of 371,875 teu and a market share of 1.7%. It has no ships on order.

In the frenzied wave of liner consolidation over the past few years, Zim has often been seen as a likely takeover candidate, but politically the Israeli government would probably veto any such deal.

Notwithstanding the welcome return to annual profitability, like many of its rivals, Zim experienced a disappointing final quarter, recording a net loss of $1m, compared with a gain of $1m in the same period of 2016. In fact, Zim’s average rate per teu in Q4 declined to $959, against a 12 month average of $995.

It said: “Overcapacity still exists in the market and market conditions, on the whole, remained volatile as freight rates partially decreased towards the end of 2017.”