Bloomberg News

Israel Corp.’s Zim Unit Posts Quarterly Loss as Costs Rise

November 24, 2011

(Closes share price in second paragraph, adds analyst comment in third.)

Nov. 24 (Bloomberg) -- Israel Corp.’s Zim Integrated Shipping Services Ltd. unit reported a third-quarter loss of $66 million after a year-earlier profit of $37 million as transport prices fell and costs increased.

Shares of Israel Corp., the holding company controlled by the Ofer family, slumped 5 percent to 2,110 shekels, the lowest since September 2009.

“It is still early to evaluate the full impact of Zim on Israel Corp.,” Eran Yunger, an analyst at Midgal Capital Markets in Tel Aviv wrote in an e-mailed report today. Zim “will need an additional injection of cash if there is no change to its business environment,” he wrote.

Container lines’ earnings have slumped this year as fuel prices increase, while rates on Asia-West Coast routes decline. Extra trans-Pacific capacity may prevent the lines from pocketing surcharges that usually make the second half their most profitable period.

Standard & Poor’s Maalot cut Zim to “ilBB-” from “ilBBB- ” with a “negative” outlook today, saying the erosion of transport tariffs and an increasing supply of competing ships will lead to “continued deterioration” at the shipping company.

Israel Corp.’s third-quarter profit rose to $156 million from $106 million a year earlier as revenue increased 21 percent to $3.08 billion.

--Editors: Susan Lerner, Dick Schumacher

To contact the reporter on this story: Shoshanna Solomon in Tel Aviv at ssolomon22@bloomberg.net

To contact the editor responsible for this story: Calev Ben-David at cbendavid@bloomberg.net


Burger King's Young Buns
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus