News Column

Zim narrows loss on eve of debt settlement

August 24, 2014

By Efrat Peretz, Globes, Tel Aviv, Israel

Aug. 24--From the partial data published by parent company Israel Corporation (TASE: ILCO), it emerges that Zim Integrated Shipping Services Ltd. lost $69 million in the second quarter.

In comparison with the corresponding quarter of last year, Zim narrowed its loss by nearly $30 million, and the going concern warning has been dropped from its financials.

Zim posted EBITDA of $29 million in the second quarter, 141% more than the $12 million posted in the corresponding quarter. Cash flow from ordinary activities totaled $19 million, compared with $14 million in the corresponding quarter, and the company posted an operating loss of $9 million, compared with a loss of $19 million in the corresponding quarter.

The volume of containers transported totaled 619 thousand TEU in the quarter, 2% less than in in the corresponding quarter. Zim explains that the decline mostly stems from the closure of trading activity between North America and Europe and between Northern Europe and Asia.

Zim's second quarter revenue fell 10% to $875 million, mainly because of the closure of lines, the sale of a container factory in China in the third quarter of 2013, and continued pressure on prices. The average price per container was $1,206, down $40, or 3%, from the price in in the corresponding quarter.

This is the picture of the state of the company before the debt arrangement it signed on July 16. Israel Corporation's share of the settlement comprises a cash injection of $200 million, a credit line of an additional $50 million, a $10 million guarantee, and the dilution of its holding to 32%. The banks, ship owners and bondholders will write off half of a debt totaling $3.4 million, and will receive 68% of the company.

Israel Corporation is due to release its financials on Tuesday. It is estimated that it will post an accounting profit of some $500 million on the debt settlement in Zim.


(c)2014 the Globes (Tel Aviv, Israel)

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Source: Globes (Tel Aviv)

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