2M alliance co-operation and higher freight rates help Zim post Q2 profit
ISRAELI shipping line Zim achieved a net profit of US$5
ISRAELI shipping line Zim achieved a net profit of US$5.1 million in the second quarter, marking a reversal of fortunes compared to the loss of $33.2 million it recorded in the second quarter of 2018.
The stronger result came on the back of an average freight rate increase of 9.5 per cent to $993 per TEU, improved market conditions and its operational cooperation with the 2M carrier alliance.
That said, Zim will still carry forward a net loss of $19.2 million for the first half of the year, reported UK's The Loadstar.
Second-quarter revenue rose by 3.9 per cent year on year to $834 million on a 5.3 per cent decline in liftings to 731,000 TEU.
CEO Eli Glickman was quoted as saying: 'Zim's results for the first six months of 2019 are encouraging; we can clearly see the benefits of our long-term strategy - specifically, the operational cooperation with the 2M, recently expanded to a fourth trade.'
Last September, Zim partnered with 2M alliance members Maersk and MSC on the Asia to US east coast tradelane, and achieved substantial cost savings on its hitherto standalone services. The trio are expanding the cooperation into three new tradelanes: Asia to the east Mediterranean; Asia to the US west coast; and Asia to US Gulf ports.
Regardless of Zim's improved profitability, Mr Glickman presented a cautious outlook, warning of 'instability and volatility in the market' and uncertainties in global trade, 'mainly due to US-related trade restrictions', and the industry shake-up from the International Maritime Organization's 0.5 per cent sulphur cap on fuel, effective from January 1.
Zim is ranked the 11th biggest global carrier, with a fleet of 62 vessels for a total capacity of 282,133 TEU, of which only four ships are owned.