eBusiness Weekly
Michael Tome
Transport and Logistics firm, Unifreight Africa, says it expects the recently enhanced fleet size to generate healthier turnover in the 2023 financial year and mitigate sizeable fixed overheads the business carries.
Unifreight has since 2020 been on a recapitalisation drive, pursuing new revenue streams and investing in new vehicles, setting a firm foundation for its business sustainability.
As such, moving towards the end of last year and beginning of 2023, Unifreight managed to secure 100 brand-new trucks and trailers.
According to the logistics company, the new investments will go a long way in enhancing the company’s earnings and upsetting business outlays leading the company into profitability.
Unifreight indicated that despite a number of imposing challenges that weighed down the company’s performance in 2022, it recorded a number of encouraging developments that will ensure the group’s growth in the outlook.
Through the drive, Unifreight also signaled intentions to procure 15 more trucks given the current state where the delivery fleet collection is fast reaching retirement age.
“With the increase in fleet size the business is also able to generate higher turnover figures which help to dilute the considerable fixed overhead the business carries, further helping future profitability.
“Staff cost is one such area where we have seen improvements with costs forecast to be around 25 percent of revenue, down from the 2022 high of 35 percent,” said Unifreight chief executive officer, Richard Clarke, in the 2022 annual report.
According to Unifreight the move to acquire trucks is meant to reposition the company as a dominant force in the Zimbabwean transport sector.
Adding that the move had allowed the 2023 financial year to start on a better footing as the assets arrived during the fourth quarter of 2022 and the first quarter of 2023.
The company said it managed to make its acquisitions despite a tough operating environment.
Unifreight board chairman, Peter Annesley, noted that the additional procurement of trucks was long overdue as the market is readily availing additional volume to the group.
“Amongst the challenging macro-economic conditions, Unifreight managed to secure a very attractive instalment sale agreement from a foreign creditor resulting in the recapitalisation of 100 brand new FAW 380hp prime movers with 100 AFRIT taut-liner trailers.
“The group is optimistic about the future and will drive growth through increased capacity availability as well as improved efficiencies.
“The additional 100 trucks were long overdue with the market readily availing additional volume to Unifreight.
“This substantial recapitalisation will go a long way towards diluting the fixed cost overhead of the business,” he said.
The logistics company also said it was optimistic about the future and will drive growth through increased capacity availability as well as improved efficiencies.
This is coupled with expectations of an improved tobacco transportation business in 2023 where the company aims to transport over 40 million kilogrammes a positive from 25 million kilogrammes of tobacco transported during the 2022 marketing period.
In terms of performance, the transport group made a loss of $1,5 billion in the 2022 financial year attributable to the group’s shareholding in Zimplow, which declined by $2,16 billion, driven by the inflation-adjusted re-valuation.
Revenue grew 31 percent to $14, 4 billion while Earnings Before Interest and Taxes (EBIT) declined 58 percent on the back of a 306 percent increase in financial costs in
2022.
Unifreight 2020 disposed of two subsidiaries to Zimplow Holdings for equity consideration as the company sought to transform its illiquid investments into tradable ZSE
shares.
