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ZIM Q4 and Annual 2015 Results

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ZIM Integrated Shipping Services Reports Results for Three and Twelve Months Ended December 31, 2015

Generated Adjusted EBITDA of $217 million, an 87% Increase over 2014

Recorded an Operating Profit in a Challenging Market; Concluded 2015 Among the Top Performers in the Global Container Liner Industry, Based on Average Adjusted EBIT Margins

Three Months and Twelve Months Highlights:

  • Reported Adjusted EBITDA of $20 million and $217 million for the three and twelve months ended December 31, 2015, respectively
  • Achieved Adjusted EBITDA margins of 2.9% and 7.2% for the three and twelve months ended December 31, 2015, respectively
  • Achieved Adjusted EBIT margins of -0.7% and 3.9% for the three and twelve months ended December 31, 2015, respectively
  • Carried 590 thousands TEUs and 2.3 million TEUs in the three and twelve months ended December 31, 2015, respectively

ZIM Integrated Shipping Services Ltd., one of the world’s leading container shipping carriers focused on trades in select markets, today announced financial results for the three and twelve month periods ended December 31, 2015.

ZIM achieved an adjusted EBIT margin for the year of 3.9% and an adjusted EBITDA margin of 7.2%. This compares to an adjusted EBIT margin of negative 0.3% and an adjusted EBITDA margin of 3.4% in 2014. The Company’s strong improvement in margins in 2015 was achieved against a backdrop of challenging market conditions, highlighted by vessel overcapacity and extremely low freight rates. Global capacity increased in 2015 by an historical amount of 1.7 million TEUs, or about 8.5%, and resulted in a sharp drop in freight rates, pushing the Shanghai Containerized Freight Index (SCFI) to all-time lows. While the idle fleet reached a peak of about 8% of global capacity, market challenges remain as the order book at the end of 2015 stood at 4M TEUs, out of which 1.3M TEUs are expected to be delivered during 2016.

Rafi Danieli, ZIM’s President & CEO, said: “The comprehensive structural, operational and organizational changes we have implemented in recent years enabled us to achieve operating margins ranked among the top in the industry, despite continued overcapacity and freight rate deterioration. In the current market environment, our asset-light business model enables ZIM to benefit from highly flexible and cost-efficient fleet management.We continue to implement our business plan, focusing on select markets where the Company has a competitive advantage.”

Financial and Operating Highlights:

The fourth quarter of 2015 was characterized by a continued deterioration of the market environment and historically low freight rates. The average freight rate per TEU carried was $988 in the fourth quarter of 2015 and $1,126 for the year, reflecting a 21% and 9% decrease compared to the respective periods last year. As a result of significantly lower freight rates, total revenues in the quarter decreased 15% to $687 million, compared with $813 million in the same period last year. Revenues for the full year decreased 12% to $2,991 million, compared with $3,409 million in the same period last year.

The Company carried 590 thousands TEUs in the fourth quarter of 2015, reflecting a 5% increase compared to the same period last year, and a total of 2.3 million TEUs in 2015, reflecting a 2% decrease compared to 2014. Carried quantities were negatively affected by lower global demand in 2015, offset by the positive contribution of the new Z7S service that the Company launched earlier in the year.

Financial Highlights for the Three Months Ended December 31, 2015:

  • Adjusted EBIT was negative $5 million, compared to $5 million for the fourth quarter of 2014
  • Adjusted EBITDA was $20 million, compared to $30 million for the fourth quarter of 2014
  • EBITDA was $7 million, compared to $21 million for the fourth quarter of 2014
  • Net loss was $28 million, compared to net loss of $7 million for the fourth quarter of 2014
  • Operating cash flow was $17 million, compared to $43 million for the fourth quarter of 2014

Financial Highlights for the Twelve Months Ended December 31, 2015:

  • Adjusted EBIT was $118 million, compared to negative $12 million for the same period of 2014
  • Adjusted EBITDA was $217 million, compared to $116 million for the same period of 2014
  • EBITDA was $204 million, compared to negative $18 million for the same period of 2014
  • Net income was $7 million, compared to net loss $198 million for the same period of 2014
  • Operating cash flow was $173 million, compared to $121 million for the same period of 2014

For additional information on the adjustments of Non-IFRS financial measures, please see “Supplemental Non-IFRS Measurements” section in our “Operating and Financial Review for the period ended December 31, 2015.”

Source: http://www.zim.com/newsandpress/recentnews/pages/zim-q4-and-annual-2015-results.aspx