Sophisticated read data from .txt file

High-performance operation on files is not my expertise, especially in Mathematica. Here is another solution that involves python along with ExternalFunction. First you need to install python from the official site:

Save this code as a python file (I will save it as "C:file.py"):

def read_my_format(file):
    read = 0
    r1 = []
    r2 = []
    temp = []
    result = []
    with open(file,'r') as f:
        for line in f.readlines():
            if line == 'ITEM: TIMESTEPn':
                read = 1
                continue

            elif line == 'ITEM: BOX BOUNDS pp pp ppn' or line == 'ITEM: NUMBER OF ATOMSn':
                read = 0
                continue

            elif line.strip() == 'ITEM: ATOMS id element xu yu zu':
                read = 2
                continue

            if read == 1:
                r1.append(int(line))
                if temp:
                    r2.append(temp)
                    temp = []
                read = 0
            
            elif read == 2:
                c = line.strip().replace('  ',' ').split(' ')
                c1 = float(c[0])
                c2 = map(float,c[2:])
                temp.append([c1,c[1],*c2])
        r2.append(temp)

    for i,vs in enumerate(r2):
        temp2 = []
        for v in vs:
            temp2.append([r1[i],*v])
        result.append(temp2)
    
    return result

Use the new function introduced in V12:

myFormat = ExternalFunction["Python", ReadString@"C:file.py"]

Now apply it:

myFormat["C:data.txt"];

Note: I test it on a 11.5 MB data file and it tooks 3.8 seconds to call python from Mathematica, read and parse the file in python and translate back the result. If you only use python and get the result in the python environment, it's around 0.6 seconds (it means Mathematica takes ~3 seconds to translate data to it's data types).

You could also register it as an import format.