Rating agency Standard & Poor's Maalot Ltd. has raised the rating of wholly-owned Israel Corp. (TASE:ILCO) subsidiary Zim Integrated Shipping Service Ltd. by four levels to BB+. The higher ranking follows the shipping company's return to profitability in the second quarter of 2010. S&P Maalot has also given Zim a "Positive Outlook."
S&P Maalot said, "Zim's operational performance is better than expected and is above the forecast presented to us as part of the business plan that accompanied the debt arrangement agreed in December 2009. The positive change in the business environment, which began in the first half of 2010, was reflected in a rise in transportation fees and the scale of activities, and before a significant improvement in Zim's short term liquidity picture. The company's level of leveraging remains very high, but there is no fear of a failure to repay in the short term."
Zim recently published its financial report for the second quarter of 2010 showing an operating profit (EBITDA) of $87 million, and positive cash flow from current activities of $94 million. Revenue was $933 million, 72% up from the corresponding quarter of 2009.
Zim has also taken recently delivery of two huge ships as part of a serious of eight new ships being financed by an international banking consortium.
Israel Corp's share price was up 0.5% at NIS 3,459 in afternoon trading on the TASE.
Published by Globes, Israel business news - www.globes-online.com - on September 26, 2010
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