• On the 11^th of May, duty on 11 basic goods were scrapped
• This will impact hugely the local producers
• The company recorded impressive financial results

Harare- Transport and logistics Company, Unifreight Zimbabwe Limited says the recent measure put by Finance and Development Minister, Professor Mthuli Ncube that exempt 11 basic goods from paying duty is a disruptive economic measure that is going to affect the overall industrial performance.

In a trading update for the quarter ended 31 March 2023, the Company said the measure was a stab to the economy amid exchange rate volatility that is negatively affecting the ability of the formal retailer and manufacturer to compete with taxed-imported products from South Africa.

On the 11^th of May 2023, Ncube announced a busload of economic measures to stabilise the under-fired economy and the Zimbabwe dollar at large. Some of them included 100% retention of local foreign sales by companies, further liberalisation of the auction market, raising interests on the short-term loans and removal of tax and duty on 11 basic commodities to alleviate consumers from soaring prices courtesy of the rapid depreciation of the local currency.

However, the mostly startling measure was duty suspension on basic goods, a policy that is going to downsize the Zimbabwe’s economy by reducing it a South African supermarket.

Despite benefiting the public with the provision of cheaper goods on the market, it weighs more on the economy as increased competition will dampen productivity, thus, Zimbabwe will continue being a net importer stabbing formal businesses at large.

“As Unifreight relies heavily on business-to-business transport in the formal trading environment, any disruption to the formal sector is likely to have negative consequences within the Unifreight Africa business,” the Company said in a trading update.

“The recent suspension of import duty and import VAT on 11 different basic commodities is another disruption likely to have very negative consequences to industry and thus Unifreight,” added the Company.

However, the Company reported impressive performance, with both revenue and EBITDA increasing by notable margins.

Revenues increased by 29% from US$3.48 million in 2022 to US$4.49 million during the period under review.

“The increase was driven by an increase in available capacity as we took delivery of the first 75 of 100 new FAW JN5 380hp 6x4 Tractor Units which have been paired with Afrit Taut-liners,” said the Company.

 Due to cost-cutting strategies implemented during the period, expenditure was 21% below budget.

The combination of increased top line revenue growth with cost cutting measures has resulted in a EBTDA profit of US$771k for Q1 2023.

“This is 159% above budget and we expect the trend to continue for the remainder of the year,” the Company added.

The Company said the 75 FAW units are performing very well achieving over 2.1km/litre on a combination of short and long-haul work as well as costing below USD 0.025c/km to maintain.

Owing to the impressive performance of the FAW, the Company said it expects to purchase a further 15 FAW 8 140hp FL (5 Toners) as well as 15 FAW 28 290hp FL (13 toners). These assets will be used to replace and expand the current collection and delivery fleet.

“With another 100 FAW’s added to the Unifreight fleet, fixed overheads will be diluted, and the business will be able to continue on from the fine Q1 trading performance.”

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