Zim turns to operating profit in Q2

In the second quarter of 2010 Zim posted operating income for the first time since the economic crisis, as well as net income. The company closed its cash flow gap versus its business plan prepared during the financial restructuring.

For Q2 2010, Zim? revenues increased by 72% compared to Q2 of 2009 to $933 million, generating an income of $46 million, EBITDA of $87 million, and net income of $3 million. This is the first time since the economic crisis that Zim has reported positive operating income.

These results were achieved not only owing to the dramatic improvement in the market conditions in the container shipping sector, but also as a result of the internal efficiency program and structural changes implemented by the company.

Zim recorded positive cash flow from operating activities of $94 million during the second quarter. As such, it has fully closed the gap versus its business plan (approximately $70 million), which was reported at the beginning of the year.

Zim? net income for Q2 of 2010 was $3 million, as opposed to a loss of $186 million for Q2 of 2009.
Mr. Nir Gilad, Zim Chairman and CEO of Israel Corp., stated, last year, Zim completed complex global financial restructuring, the execution of which required, among other things, a massive injection of capital by Zim? main shareholder, Israel Corporation. The dramatic improvement that Zim has achieved in the second quarter confirms that Israel Corporation strategic decision, which was in its own interest, to support ZIM by injecting this massive capital, which was also authorized by the General Assembly, has proven itself so far.

I am happy to report Zim dramatically improved results in the second quarter, as demonstrated by the operating income recorded for the first time since implementing its financial restructuring, as well as a net income. Equally impressive, Zim has closed the cash flow gap versus its business plan. In this vein, it is important to note two important factors: 1) the re-organization that Zim completed, the peak of which was the stabilization plan; and 2) the completion of the plan, the last step of which was concluded with the delivery of vessels from the Korean shipyards and the injection of an additional $500 million via international banking financing.

The banking community continuing support of Zim, the dramatic improvement in its business results and the success of its re-organization and efficiency measures, are already proving themselves and pointing towards Zim steady movement away from the crisis as demonstrated already last year with the completion of its financial restructuring and the upgrade of Zim bonds credit rating.