Bruce Barnard, Special Correspondent | Nov 25, 2011 11:23AM EST
Israel’s Zim Integrated Shipping Services slumped to a $66 million net loss in the third quarter and the carrier braced for a new cash injection amid a grim outlook for the coming months.
The loss, following a $37 million profit a year earlier, came as lower ocean freight rates outweighed increased ocean container traffic.
Revenue declined 8 percent to $973 million and average freight rates slipped 12 percent to $1,310 per 20-foot-equivalent unit, even as traffic rose 8.4 percent to 646,000 TEUs.
The third quarter loss followed a $68 million deficit in the three months through the end of June.
Zim, which was bailed out with a $450 million capital injection in 2009, is to get $100 million of fresh equity from Israel Corp, which controls over 99 percent of the carrier.
Standard & Poors Maalot cut its rating for Zim to BB- from BBB- with a “negative” outlook, citing expectations for a significant worsening in its operating results.
“The negative ratings outlook reflects our expectation that the company will continue to report a negative cash flow from ongoing operations in the coming quarters and erode its cash reserves,” the ratings agency said.