Container shipping company Zim is the latest carrier to post significant losses in 2011, ending the year with a net loss of US$397 million, compared to net profit of $54 million in 2010.
The fourth quarter of 2011 was brutal for the line, which saw losses hit $151 million as demand dropped and freight rates fell off a cliff. In the same three months during 2010 the carrier made almost $100 million profit.
Zim said in its results statement that freight rates in the market had begun to increase as lines withdrew capacity. Idle vessels have reached 6 percent of the global fleet, which supports the rate increases, and shipping companies have announced more rate increases for the coming months, further supporting the upward trend, Zim said.
The carrier said a new business plan had been completed and agreed upon by all relevant banks, and financial covenants had been adjusted accordingly to reflect market conditions. It said other developments were a significant increase in the containers carried in 2011 compared with 2010, positive cash flow from operations in 2011, and continued implementation of Zim's strategic and efficiency plan.
While in the past Zim's performance was below the average of liner industry, in recent quarters Zim has closed the gap and its operating margins are now in line with the industry average, the statement said. |
