ZIM ends 2014 with significantly improved Non-GAAP (generally accepted accounting principles) results, partly due to the completion of the Company’s debt restructuring, on July 16, 2014.
The $3.4 billion debt restructuring, which included a debt to equity swap of $1.4 billion, significantly improved the Company’s financial strength and brought the Company to report positive equity.
ZIM is concentrating its efforts on executing its business plan which was vital part of the restructuring. In substance it focuses on profitable lines where the company offers added value to its customers, while improving and upgrading its points of interface with customers and continuing to improve its operational efficiency.
The improved results derive, among other things, from organizational changes and expanding the scope of cooperation with other shipping companies which was unattainable before finalizing the restructuring. The reduction in fuel prices, which occurred towards the end of the year, also contributed to the improvement in Q4, despite these prices remaining unstable.
Q4 results (in Non-GAAP terms as well) include an accounting expense of $21 million due to the revaluation of fuel hedging transactions. Excluding this expense, Q4 results in particular, and 2014 annual results in general, reflect an even more significant improvement compared to Q3 and the previous year.
2014 EBIT operating profit (in Non-GAAP terms) shows a sharp improvement, amounting to a $12 million loss compared to a $161 loss in 2013. In Q4 the EBIT amounted to $5 million, reflecting a decline compared to a $14 million operational profit in the previous quarter.
As mentioned, excluding the $21 million expense due to revaluation of derivatives, the company recorded an improvement with an EBIT of $26 million in Q4. 2014 EBITDA (in Non GAAP terms) amounted to $116 million profit, compared with a $2 million loss in 2013. The Q4 EBITDA profit amounted to $30 million, compared to $41 million in the previous quarter. As mentioned, excluding the expense due to revaluation of derivatives, the company recorded an improved EBIDTA of $51 million in Q4. The net loss (in Non GAAP terms) has been significantly reduced, from $343 million in 2013 to $127 million in 2014. The Q4 net loss amounted to $4 million, reflecting a $16 million improvement compared to the previous quarter.
As mentioned, excluding the expense due to revaluation of derivatives, the company shows a profit of $17 million in Q4. The operating cash flow in 2014 amounted to $121 million compared to $13 million in 2013. The operating cash flow in Q4 amounted to $42 million, a $5 million improvement compared to last quarter. The Company carried 2,360,000 TEU containers in 2014, a 6% decrease compared with 2013. Most of the decrease was as a result of terminating the service from Asia to Northern Europe as part of its business plan.
In Q4 the company carried 577,000 TEU’s compared with 646,000 in Q4 of 2013. The total revenues in 2014 amounted to $3.4 billion compared to $3.7 billion in 2013. Q4 revenues amounted to $813 million compared to $888 million in the corresponding quarter of 2013. The average freight rate per TEU in 2014 was $1,243, compared with $1,219 in 2013, a 2% increase.
In Q4, the average freight rate per TEU amounted to $1,271, compared to $1,181 in the corresponding quarter in 2013, an 8% increase. In spite of the reduction in revenues, ZIM managed to improve its operating profit thanks to its continued efficiency drive, improved sales and customer service, reduced fuel costs in the latter part of 2014, the termination of non-profitable lines, and freight rate increases in some other lines. The measures and initiatives that the Company promotes are reflected in a consistent improvement in its results and they put the Company in a good position towards further improvement in the future.