ISRAEL flag carrier Zim narrowed its net loss in the first quarter by 45 per cent to US$62 million as its pre-tax profit advanced year-on-year from a $6 million loss to $29 million gain, drawn on revenues of $867 million, down 5.8 per cent.

The troubled, indebted company, enjoyed a two per cent first quarter year-on-year volume increase to 617,000 TEU, but suffered a five per cent average freight decline to $1,213 per TEU.

"The results show continued improvement quarter on quarter and are in line with the industry average," the company said.

Zim's $3 billion restructuring will produce great improvements, said the company. The plan involves a $1.4 billion debt for equity exchange with creditors and its still subject to creditor and shareholder approval.

"With a dramatically improved balance sheet and cost structure, and the support of a committed workforce, the company is poised for a dramatic improvement in profitability over the coming year," said the company statement.

But Zim CEO Rafi Danieli said "employees must take their share of responsibility for the company's future and join in the effort to successfully complete the restructuring. Their co-operation is vital".

Zim said labour contracts signed when the company was a state-owned enterprise, now need to "address economic realities and the fiercely competitive environment".

As reported earlier, 99.7 per cent shareholder Israel Corp will inject $200 million, but it will reduce its stake to 32 per cent.