ZIM posts Q3 2014 results
ZIM publishes the results for the third quarter of 2014, following the completion of the company’s debt restructuring, on July 16, 2014. The $3.4 billion debt restructuring, which included a debt to equity swap of $1.4 billion, significantly improved the Company’s financial strength and brought the company to report positive equity. This, together with the deletion of the 'going concern' qualification already in Q2 2014 reports, placed ZIM in a favorable position to ride the wave of global economic recovery, the company said in its press release.
The Non-GAAP results for the third quarter of 2014, show an improvement in the operational profitability and cash flows and reduction in the net loss. ZIM is concentrating its efforts on executing its business plan, which in substance focuses on profitable lines where the company offers added value to its customers, while improving and upgrading its points of interface with customers and continuing to improve its operational efficiency. The company continues the implementation of its strategic plan in order to improve its results and its operational efficiency.
The operating profit (EBIT) on a Non-GAAP basis, for the third quarter of 2014, was $14 million, reflecting a sharp improvement compared to the previous quarter and the corresponding quarter last year, in which the company had an operating loss of $15 million and $28 million correspondingly.
On a GAAP basis, the company had a negative EBIT of $251 million in the third quarter compared to $9 million loss in Q2 and a $16 million profit in the corresponding quarter last year.
The Non-GAAP EBITDA for the third quarter 2014 was $41 million compared to $23 million in the second quarter of 2014 and $11 million in the corresponding quarter last year.
On a GAAP basis, the Company had a negative EBITDA of $97 million in the third quarter compared to $29 million profit in the second quarter of 2014 and $56 million profit in the corresponding quarter last year.
The net loss on a Non-GAAP basis in the third quarter 2014 was $20 million, representing $56 million improvement compared to the corresponding quarter last year.
On a GAAP basis, the third quarter of 2014 net loss was $63 million, compared to $68 million loss in the second quarter and $42 million loss in the corresponding quarter last year.
The operating cash flow in the third quarter of 2014 was $37 million, an improvement of $18 million compared to the previous quarter and about $22 million compared to the corresponding quarter last year.
The Company carried 557 thousand TEUs during the quarter, reflecting a 10% decrease compared to the previous quarter and 13% compared to the corresponding quarter in 2013. Most of the decrease was as a result of terminating the service from Asia to Northern Europe as part of the business plan.
The total revenues in the quarter were $854 million compared to $875 million in the previous quarter and $900 million in the corresponding quarter last year. The reduction in revenues was also a result of terminating the service from Asia to northern Europe. The average freight rates per TEU was $1,281, an increase of $75 per TEU (6%) compared to the freight rate in the previous quarter, and an increase of $79 per TEU (7%) compared to the corresponding quarter last year.
In spite of the reduction in revenues and volume of containers carried, ZIM managed to reduce the net loss and recorded an operating profit thanks to the company’s continued streamlining activities, improving the sales and service, combined with the decline in fuel prices (accelerated further after the balance sheet date), reducing activities of unprofitable lines, and increase in freight rates in certain lines.
