Israel Corporation (TASE: ILCO) subsidiary Zim Integrated Shipping Services Ltd. continues to suffer from the severe slump in the shipping industry. The company posted a loss of $61 million for the third quarter of 2008, compared with a profit of $18 million for the corresponding quarter of 2007. The company lost $131 million in January-September, compared with a profit of $32 in the corresponding period.
Israel Corp. CEO Nir Gilad said, "Zim is our company that is the most quickly affected and to the greatest extent by the economic situation."
Although Zim's revenue rose 13% to $1.18 billion for the third quarter from $1.05 billion for the corresponding quarter. However, a plunge in shipping rates and soaring fuel costs resulted in a gross loss of $31 million for the third quarter, compared with a gross profit of $73 million for the corresponding quarter.
Israel Corp. is pessimistic about Zim's future. "If the severe market climate in the shipping industry and financial markets continue, it is liable to affect the company's results, it ability to meet financial criteria, its credit rating, and ability to raise capital. Zim is negotiating with the banks to change or forego the financial criteria for a period of time," states Israel Corp. in its financial report for the third quarter.
Published by Globes [online], Israel business news - www.globes-online.com - on November 27, 2008
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