ZIM Integrated Shipping Services Ltd., one of the world’s leading container shipping carriers focused on trades in select markets, last week announced financial results for the three and twelve month periods ended December 31, 2015. It 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 4 million TEUs, out of which 1.3 million 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.”
The Company carried 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 Twelve Months Ended December 31, 2015:
- Adjusted EBIT was USD 118 million, compared to negative USD 12 million for the same period of 2014
- Adjusted EBITDA was USD 217 million, compared to USD 116 million for the same period of 2014
- EBITDA was USD 204 million, compared to negative USD 18 million for the same period of 2014
- Net income was USD 7 million, compared to net loss USD 198 million for the same period of 2014
- Operating cash flow was USD 173 million, compared to USD 121 million for the same period of 2014
