Israel’s Zim Struts to Big Loss

 earlier this week after announcing an agreement with Samsung to cancel five ship orders. Photo: ZIM Antwerp on river Elbe, approaching Hamburg. File photo courtesy Zim

By Ari Rabinovitch

JERUSALEM, March 21 (Reuters) – Israeli shipping company Zim shrugged off a 58 percent increase in fourth-quarter losses by pointing to signs of recovery for the global shipping industry in the coming year.

Though the industry has suffered from overcapacity and the global economic slowdown in recent years, Zim Chief Executive Rafi Danieli expects an upturn in the second half of this year.

“There are indications of an increase of traffic of goods in the world,” Danieli told Reuters after the company reported fourth-quarter losses widening to $239 million from $151 million a year earlier.

“It is still challenging and still not at the levels it should be, or was in the past, but we are seeing a trend that will take shape more in the second half than in the first half (of 2013).”

Zim will also benefit from its decision to cancel an order made in 2007 for five new ships. Though the cancellation and resulting loss of Zim’s downpayment accounted for $133 million of the fourth-quarter loss, the company will be able purchase vessels that are now both cheaper and more efficient, Danieli said.

The CEO said that Zim, a subsidiary of conglomerate Israel Corporation, is focusing on increasing profits rather than chasing market share.

“We won’t grow our market share simply for that growth if it doesn’t improve the company’s profitability,” he said, adding that the company has also taken steps such as changing the structure of shipping lines and finding new partnerships to increase operational efficiency. (Editing by David Goodman)

(c) 2013 Thomson Reuters, Click For Restrictions

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