Unifreight Africa Limited (UNIF.zw) HY2019 Interim Report

We have extracted the Chairman’s Statement from the 2019 half year report for Unifreight Africa Limited (UNIF.zw), listed on the Zimbabwe Stock Exchange:

Overview

We are pleased with the results for the Half Year Ending 30 June 2019 which are good, especially considering the subdued business environment prevailing in the country at the moment.

Functional currency changes were introduced by Statutory Instrument (S.I.) 33 of 2019 which was issued in February 2019 consequently recognising the RTGS Dollar as a currency in Zimbabwe. S.I. 33 of 2019 also prescribed the manner in which certain balances were to be treated.

Revenue is up $16.1M (123%) on prior year, and $10.1M (53%) ahead of budget. EBITDA is up $6.2M (299%) on prior year, $3.5M (103%) ahead of budget. We are pleased to report a profit before tax of $4.5M for the first half, which is $1.8M ahead of budget and $3.9M ahead of the previous year.

The numbers in RTGS$ terms are fairly misleading, but we are very pleased with our volumes. Our focus on Low Margin LTL (Less Than Truckload) business is still bearing fruit with a 140% increase in overall yield. Although overall tonnage is down 5.8% on last year, this is by design to shift more volume to LTL having increased by 25.5 % vs prior year, and both LTL and FTL (Full Truckload) are ahead of budget by 1.8% and 5.5% respectively giving a total volume ahead of budget by 3.6%.

Going into the second half of the year – our strategy is to protect shareholder value on the balance sheet and bank the gains we have made by continuously renewing our fleet and limit exposure to foreign borrowings; considering that our legacy liabilities (now in RTGS$) have been eroded by the exchange rate resulting in understated values. We have also introduced measures through which we can lock and maintain the purchasing value in light of the inflationary environment. We are quietly confident that despite most of our customers being +/- 40% down on volumes,we will find new business to fill this capacity and have a profitable year.

Dividend

The board declared an interim dividend of 0.704 cents per share for the half year ended 30 June 2019. A separate statement.2019. A separate statement on the dividend will be issued.

Appreciation

On behalf of the board, I would like to extend my sincere appreciation to our valued stakeholders. I am grateful to my fellow board members, management and staff for their continued commitment and going the extra mile.

P.J. Annesley
Chairman