Losses Exceeded $2.2 Billion! Worst Losses For Shipping Companies Emerge
Nov 16, 2023
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Israeli container liner company Star ZIM has announced its consolidated results for the third quarter and first nine months ended September 30, 2023. The net loss for the third quarter of the year amounted to USD 2.27 billion, compared to a net profit of USD 1.166 billion in the third quarter of 2022. The net loss for the quarter was primarily driven by a non-cash impairment loss of $2.063 billion.
Similarly, the company's adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) declined 89% year-on-year to $211 million, compared to ZIM's $2.3 billion in EBIT in Q3 2022, after realizing $1.5 billion in operating profit in the same period last year.
Additionally, Star reported third-quarter revenue of $1.273 billion, down 61% year-over-year. In addition, the company reported an adjusted EBIT loss of $213 million in the third quarter, compared to an adjusted EBIT of $1.5 billion in the third quarter of 2022.
On the other hand, the company saw a slight increase in box volume, handling 867,000 TEUs in the third quarter of 2023. However, the average rate per TEU for the period was $1,139, down 66% year-on-year.
Eli Glickman, President and Chief Executive Officer of Enstar, said, "Enstar's third quarter results reflect the current operating environment, where demand remains weak and freight rates continue to deteriorate. In light of the negative outlook for near-term freight rates, EStar recorded a non-cash impairment loss of approximately $2.1 billion that negatively impacted ZIM's net income and revised our full-year guidance. Adjusted EBITDA is expected to be $900 million to $1.1 billion in 2023, with an adjusted EBIT loss of $600 million to $400 million."
Glickman said, "We are currently in a transition period, which is expected to continue through 2024, during which the benefits of the decisive actions we have taken to enhance ZIM's commercial and operational resilience should gradually be seen."
He went on to add: "We have initiated a fleet renewal program that includes 46 newbuild container vessels, 28 of which are 'green' LNG vessels, and with the delivery of these new vessels and the phasing out of older and less efficient vessels, it is expected that this will improve ZIM's cost structure and drive long-term earnings growth. Our cost per TEU is declining, and we expect further cost reductions to be anticipated as our new ships join the fleet in 2023-2024, including a total of 28 dual-fuel LNG containerships."