Continued attacks by Houthi rebels on shipping vessels in the Red Sea have changed the financial fortunes of an unprofitable Israeli shipping company, turning them into a “money-making machine”.

Following the outbreak of the war in Gaza, the Haifa-based shipping company Zim, which was operating with massive losses, saw its stock price slide to around $7 in November. The company had been expecting a 2023 loss of more than $2 billion.

But the targeting of vessels by Houthi rebels has now forced other companies boats to go around Africa rather than through the Red Sea, meaning they will now be at sea longer and be more susceptible to dangerous weather and raids from pirates.

This, combined with Zim’s ability to increase capacity through the Red Sea and other companies’ hesitance to dock in Israeli ports has meant they have been able to quickly increase their cashflow. At the time of writing, the stock price had doubled from its November lows.

Zim, whose name is a biblical word meaning “fleet of ships”, went from “cash burning” to a “cash machine”, according to US equity research institution Jefferies. 

They added, “Red Sea diversions are likely to continue for an extended period, tightening capacity for longer, and Zim is set to capitalise.”

The attacks and seizures by Yemen’s Houthi pirates, which were ostensibly carried out in support of the Palestinian cause and to damage the Jewish State’s economy, have unintentionally greatly assisted the Israeli company, which previously was in dire financial straits.

The Houthi movement, aligned with Hamas and funded by Iran, initiated a series of attacks on October 19 targeting southern Israel and ships in the Red Sea it claimed were linked to Israel, though ships with no links to Israel were also targeted.

British and American airstrikes have struck some 60 targets in over a dozen locations used by the rebels this month.

Prime Minister Rishi Sunak said the attacks were a “necessary and proportionate action in self-defence,” with the goal of degrading “Houthi military capabilities and protect global shipping".