Unifreight Africa Limited Reports 30% Decrease in Net Profit Before Tax in 2023 First Half Due to Increased Finance Costs

Published On: September 27, 2023Company: Unifreight Africa Limited (UNIF.zw)
What was the main factor that led to a decrease in Unifreight's net profit before tax in the first half of 2023?
The main factor for the decrease in Unifreight's net profit before tax in the first half of 2023 was the increase in finance costs, particularly due to foreign denominated loans obtained to finance new vehicles.

Overview

  • Unifreight’s volumes increased by 38% year on year in the first half of 2023.
  • Tobacco transportation contributed significantly with an increase of 91% from the previous year.
  • The company dedicated specific vehicles to blue-chip customers requiring nationwide distribution including Delta, Triangle, Unilever, Nestle, and Cairns.
  • The Zimbabwe Dollar depreciated during the first half of 2023, leading to a low loan-to-deposit ratio in the banking sector and restricting businesses’ ability to borrow for short-term liquidity issues.

Financial Performance Summary

  • The financial results were prepared on an inflation-adjusted basis as required by IAS 29.
  • Inflation-adjusted Group Revenues were ZWL 55 billion, showing an increase of 115% above the previous year’s revenues.
  • The company saw a 50% growth in tonnage, driven primarily by tobacco and FTL volumes from new vehicle assets.
  • The net profit before tax was ZWL $6 billion, a 30% decrease due to increased finance costs, particularly from foreign-denominated loans obtained to finance new vehicles.
  • Total Group Inflation Adjusted Earnings were ZWL 66 billion due to the revaluation of assets following a change in accounting policy from a cost model to a revaluation model.
  • The company’s balance sheet grew from ZWL 66 billion to ZWL 269 billion due to fleet recapitalisation and asset revaluation.

Dividend Declaration

  • No interim dividend was declared as the group’s focus is on improving working capital cycles and reducing exposure to borrowings and foreign liabilities.

Outlook

  • The group is optimistic about the future, planning to utilize increased capacities during the traditional festive period ramp-up in retail spend between October and December.
  • Unifreight hopes for government interventions against informal imports to support local industry and job creation.

Appreciation

  • Gratitude was expressed to customers, business partners, shareholders, the Unifreight Board of Directors, Employees, Management, and the Executive team for their confidence, commitment, and dedication.

Useful links

About Unifreight Africa Limited (UNIF.zw)

Unifreight Africa Limited is a transport holding company in Zimbabwe, offering services in logistics, freight and passenger services to clients in sub-Saharan Africa. The company was re-named after the successful acquisition of Pioneer Corporation Africa Unifreight Africa Limited services include inter-city freight, distribution of general goods and an international courier service. Its brands include Skynet Worldwide Express, Swift and Bulwark. The engineering division operates in two sectors; maintenance of its Unifreight fleet and sales and procurement of parts for Yutong busses, aswell as heavy haulage and abnormal freight transport. Skynet Worldwide Express offers international and domestic courier and airfreight services. Unifreight Africa Limited owns a fleet of vehicles which are available on a contract agreement or for once-off hire. Unifreight Africa Limited is listed on the Zimbabwe Stock Exchange

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