Zim back in the black in Q2 but remains red in H1
ISRAEL's Zim Integrated Shipping Services has swung to a slim profit in the second quarter from a hefty loss a year ago.
The Haifa-based carrier posted a net profit of US$2.3 million compared with a net loss of $74.1 million in the second quarter of 2016 and an adjusted net profit of $12.5 million against an adjusted loss of $64 million.
Revenue soared almost 22 per cent to $745.7 million from $611.9 million, driven by a combination of a 6.7 per cent increase in container traffic to 659,000 TEU and a 16.3 per cent jump in the average freight rate to $1,007 per TEU from $866.
There was an operating profit of $36.4 million against a $40.5 million loss a year ago.
The financial turnaround highlights the advantages of an independent niche carrier in a rapidly consolidating industry dominated by a trio of powerful carrier alliances, the IHS Media reported.
Although the industry has seen a turnaround since the third quarter of 2016 with improved freight rates on most trades, "market conditions on the whole, remain challenging and volatile," the carrier said.
"In the face of this tough business environment, Zim continues to outperform the industry and achieve improved results."
Eli Glickman, Zim's recently appointed president and CEO, said the positive results in the second quarter demonstrate an ongoing, steady improvement in the company's performance.
"As an independent global niche carrier we can provide unique and flexible services to our customers. I'm confident that this approach will enable Zim to prevail and achieve additional improvements in the coming years."
While the mega-carriers seek scale and scope globally, Zim develops scale and scope within its existing service areas, George Goldman, president of Zim USA said in July.
The improved second quarter shrank Zim's first-half net loss to $4.1 million from a net loss $130.4 million a year earlier and produced a 12.8 per cent increase in revenue to $1.4 billion.
First-half traffic rose 5.2 per cent to 1.3 million TEU from 1.2 million TEU, and the average freight rate was 8.6 per cent higher at $981 per TEU.