Rate gains help Zim's first quarter losses narrow down by 49pc
AN increase in the average freight rate per TEU carried by Israeli container shipping line, Zim Integrated Shipping Services in the first quarter more than made up for a decline in volume, with the carrier reporting a significant improvement in earnings
AN increase in the average freight rate per TEU carried by Israeli container shipping line, Zim Integrated Shipping Services in the first quarter more than made up for a decline in volume, with the carrier reporting a significant improvement in earnings.
Average rates across all Zim trades during the first three months of the year increased 7.1 per cent to US$1,091 per TEU, pushing revenue up 3.4 per cent to $823.2 million despite a 4.5 per cent decrease in volume to 668,000 TEU, the carrier announced.
There was real improvement in the carrier's operating results with Zim's earnings before interest, taxes, depreciation, and amortization (EBITDA) rising 40 per cent year over year to $97.2 million in the first quarter. Adjusted earnings before interest and taxes (EBIT) of $27.2 million was 23.6 per cent above the same quarter last year and the shipping line's net loss of almost $12 million was also a 49 per cent improvement year over year.
'Despite the unprecedented impact of the coronavirus disease 2019 (Covid-19) crisis on the global economy in general, and on the shipping industry in particular, Zim was able to mitigate the adverse impact of the crisis, and Q1 2020 results show improvements in all parameters, compared to the same period in 2019, including strong cash generation and a continued deleveraging of our balance sheet,' Zim CEO Eli Glickman said in a statement.
Most of the major carriers have now reported their first quarter results, with Maersk posting a positive EBIT of $552 million, which Sea-Intelligence Maritime Consulting noted in its latest Sunday Spotlight was its second-highest first-quarter EBIT in the last decade, and a significant $322 million higher than what the carrier recorded in the first three months of 2019. Maersk was also the only carrier to record a three-digit year-over-year increase in EBIT in the first quarter.
In terms of volume, Sea-Intelligence noted that Hapag-Lloyd was the only carrier to report global volume growth in the first quarter, increasing its throughput 4.2 per cent year over year to 3.05 million TEU, bringing the Hamburg-based carrier within 1 million TEU of Cosco Shipping for the first time since the first quarter of 2015, reports UK's The Loadstar.
Cosco Shipping recorded a decline in global transported volumes of 6.3 per cent year over year to 4.01 million TEU, its lowest first-quarter figure since 2016. HMM reported an even larger decline in volume, down 18.7 per cent, while OOCL volume was basically flat through the first quarter at 1.6 million TEU. Maersk's global liftings decreased 3.2 per cent year over year to 6.1 million TEU in the first quarter.
However, Sea-Intelligence said the coronavirus mainly impacted China and neighbouring Asian countries for much of the first quarter, with the crisis only becoming global in nature at the end of March.
'As such, the real impact of the crisis will be felt in Q2 and will be reflected in the carriers' Q2 results,' Alan Murphy, CEO of Sea-Intelligence, noted in a statement. 'That said, carriers have so far maintained freight rate levels, and spot rates, net of fuel, are up 25-40 per cent in some trades, which may provide some respite in these tough market conditions.'