Successful recapitalisation spurs Unifreight Africa

TRANSPORT and logistics firm, Unifreight Africa Limited, buoyed by a successful recapitalisation exercise that added 100 new trucks in the business, now seeks to intensify the program by procuring more trucks as it eyes to venture into cross-border business.

Unifreight Africa Limited acknowledged in its 2022 annual report that while several macro-economic changes to the operating environment weighed down performance, there were also a number of positive developments that will see the business grow.

It noted that despite the challenging macro-economic conditions Unifreight managed to secure a very attractive installment sale agreement from a foreign creditor resulting in the re-capitalisation of 100 brand new FAW 380hp prime movers with 100 AFRIT taut-liner trailers.

The substantial recapitalisation will go a long way towards diluting the fixed cost overhead of the business.
Leveraging on recapitalisation drive, it now seeks to diversify and de-risk the business by actively pursuing cross-border and contract haulage.

To that end, chief executive officer Mr Richard Clarke says the firm will invest in and grow a dedicated fleet to over 100 full-time cross-border assets.
He said the firm is “excited for the year ahead.”

“After buying 100 new FAW 28.380 FT’s, Unifreight will continue its recapitalization drive by investing further into the new fleet. The current collection and delivery fleet is nearing retirement age so we will look to procure 15 FAW 8.140ft 5t van body 10 FAW 28.290FL van body,” said Mr Clark in the 2022 annual report.

“Unifreight will aim to diversify and de-risk the business by actively pursuing cross border and contract haulage.
“We aim to invest in and grow a dedicated fleet to over 100 full time cross border assets. The benefits of growing this revenue stream (are) increased foreign currency earning potential in the group, reduced seasonal fluctuations as the current business experiences peak revenue in May and

November and reduced exposure to downturns in the local manufacturing sector,” said Mr Clarke.
The Zimbabwe Stock Exchange (ZSE) listed firm is a transport holding company offering services in logistics, freight and passenger services to clients in sub-Saharan Africa.

The company has since 2020 pursued new revenue streams, investments in new vehicles and disposed of some assets, setting a firm foundation for business sustainability.

ZIMBABWE Stock Exchange (ZSE)

He added that they will be upgrading the existing depot networks’ look and feel by starting at main centres and then moving out to the rest of the network.

“Currently Unifreight has 35 depots countrywide and we would like to see this number continue to grow and support our core business which is LTL (Less Than Load). We are confident that 2023 will deliver not only vastly improved profitability to our shareholders, but also enhanced value for all stakeholders, and we are excited for the year ahead.”

Meanwhile, Mr Clarke said although the group made a loss of (ZWL$1.32b) at FY0222 which was largely driven by the Group’s shareholding in Zimplow which depreciated by (ZWL$2.16b), there have been several encouraging statistics that will help the business going forward.

For instance, repairs and maintenance fell dramatically from 12.5 percent of revenue to under seven percent by the end of 2022.
“This was largely attributed to the retirement of older assets being replaced by the newer FAW’s. 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,” he noted.

Money – Image taken from Pixabay

The tobacco sector has traditionally been an area where Unifreight has dominated the local transport market and 2022 was no different with Swift transporting 25 million kilograms during the 2022 marketing period.
With the new fleet, Swift has forecast increasing their market share by 70 percent and targets to carry over 40 million kg’s during the 2023 season.
“This is a monumental jump which will ultimately boost profitability for the company,” said Mr Clarke.-chronicle