Tobacco boosts Unifreight volumes
Transport and logistics company Unifreight Africa’s revenue for the interim period to June 2023 grew 115 percent to $55 billion compared to $22 billion in the prior year, largely driven by increased tonnage.
Listed on the Zimbabwe Stock Exchange (ZSE), Unifreight is a transport holding company offering logistics, freight, and passenger services to clients in sub-Saharan Africa.
Mr Peter Annesley, the company’s chairman, said tonnage grew by 50 percent from the prior year, largely driven by tobacco volumes and increased full truck loads (FTL) volumes from new vehicle assets.
“The first half of 2023 has been excellent for Unifreight, with overall volumes up 38 percent year on year and significant contributions coming from tobacco, where we are now transporting over 40 000 tons per year, which is 91 percent up from last year,” he said.
He added that with the new fleet, the company has also been able to dedicate vehicles to blue-chip customers such as Delta, Triangle, Unilever, Nestle, and Cairns, who all require nationwide distribution.
However, Mr Annesley said the group continues to monitor costs in the current volatile environment.
He said during the period under review, the Zimbabwe dollar continued to depreciate during HY23, which, combined with the bank policy lending rate of 80 percent, resulted in the banking sector loan-to-deposit ratio remaining low, thus restricting businesses’ ability to borrow and finance short-term liquidity issues.
“The result of this is the retroactive cash flow environment where many businesses stretch credit terms instead of utilising overdraft facilities,” said Mr Annesley.
For the period under review, the group recorded a net profit before tax of $6 billion, which is 30 percent below the prior year due to an increase in finance costs.
The company’s finance costs were driven by the revaluation of foreign-denominated loans obtained to finance new vehicles, amounting to $44 billion.
Unifreight’s total adjusted earnings were $66 billion, largely driven by the revaluation of assets following a change in accounting policy from a cost model to a revaluation model.
“Our balance sheet grew from $66 billion to $269 billion due to a combination of recapitalization of our fleet and revaluation of assets,” said Mr Annesley.
He noted the group remains optimistic about the future and looks forward to being able to utilise increased capacities during the traditional festive period ramp-up in retail spend between October and December.
Since 2020, the company has pursued new revenue streams, invested in new vehicles, and disposed of some assets, laying a firm foundation for business sustainability.
Unifreight in 2020 disposed of two subsidiaries to Zimplow Holdings for equity consideration as the company sought to transform its illiquid investments into tradable ZSE shares.
Through its subsidiary Clan Services, Unifreight had a stake of 51 percent in Tredcor Zimbabwe and 100 percent in Birmingham Investments, which were acquired by Zimplow.
The transaction was that Zimplow would acquire Unifreight’s 100 percent shares in Birmingham Investments for a consideration of $58 million to be settled with 15 774,446 newly issued ordinary shares in Zimplow.
In addition, Zimplow offered to acquire Clan Services 52 percent shareholding for a consideration of $67 million, settled with 18 399,564 newly issued shares of Zimplow.
According to Unifreight, the transaction presented an opportunity to enhance Tredcor’s performance, which the company said had dragged Unifreight’s performance down over the years.