- A record loss of ZWL9 billion was posted
- From a profit of ZWL7 billion
- The biggest loss since listing
Harare- Unifreight Africa Limited, a transportation and logistics company, has reported a half-year loss for the period of six months ended 30 June 2023, as stated in the latest financial results of the Group. The Group's profit declined significantly from ZWL 7 billion to a loss of ZWL 9 billion. This loss is the largest since the introduction of the Zimbabwe dollar in 2019.
The company has attributed this loss to substantial finance costs, which caused a decrease in profit before tax from ZWL 46 billion in EBITDA to ZWL 6 billion.
The finance costs were primarily driven by the revaluation of foreign-denominated loans that were obtained to finance new vehicles, totaling ZWL 44 billion.
The revaluation of foreign currency-denominated loans refers to the adjustment of loan values based on fluctuations in exchange rates between the local currency and the foreign currency in which the loans are denominated.
When a company borrows in a foreign currency, the value of that loan in the local currency can change over time due to shifts in exchange rates. In this case, the local currency has been weakening against the US dollar, experiencing a weekly depreciation of 35%, which has led to an increase in the value of the loan when measured in the local currency.
The mentioned factor overshadowed the Group's revenue of ZWL 55 billion, which represents a significant increase of 115% compared to the restated revenue of ZWL 22 billion from the previous year.
“The Group continues to monitor costs under the current volatile environment,” chairperson Peter Annesley said in a statement.
Nevertheless, the Group experienced a noteworthy increase in overall volumes during the period. There was a year-on-year growth of 38%, indicating a positive trend for the company. One major factor contributing to this growth was the tobacco sector, where Unifreight observed a significant surge.
The transportation of tobacco by the company saw a remarkable increase of 91%, with volumes surpassing 40,000 tons per year compared to the previous year.
The Group's new fleet played a crucial role in its operations. By dedicating vehicles specifically to esteemed customers like Delta, Triangle, Unilever, Nestle, and Cairns, who have nationwide distribution requirements, Unifreight Africa Limited successfully met their transportation needs with efficiency and effectiveness.
The tonnage experienced a significant 50% increase compared to the previous year, although it fell 18% below the targeted budget. This growth was mainly driven by the surge in tobacco volumes and the increased utilization of Full Truck Load (FTL) volumes, which were made possible by the addition of new vehicle assets. The transportation of tobacco witnessed substantial growth, making a notable contribution to the overall increase in tonnage.
The Group holds a positive outlook for the future as it eagerly looks forward to utilizing its expanded capacities during the upcoming traditional festive period. This period, which typically witnesses a rise in retail spending from October to December, presents an opportunity for the company to capitalize on its resources and effectively meet the increased demand.
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