Unifreight banks on fleet expansion to drive earnings growth
TRANSPORT and logistics company, Unifreight Africa is banking on its investment in fleet expansion and quality contracts to drive the group’s earnings growth.
The firm has been on a recapitalisation drive since 2020, pursuing new revenue streams, and investing in a new fleet to establish a firm foundation for business sustainability.
As such it managed to secure 100 brand-new trucks and trailers towards the end of 2022 and the beginning of 2023.
Additionally, last year, the company purchased and deployed truck tractors with Afrit Tautliner trailers into the local and cross-border market and expects the enhanced fleet size to generate a healthier turnover
It said its capacity investment has started paying dividends, as volumes continue to surge.
Tobacco continues to be a key revenue earner for the group as most major merchants have grown to have an affinity for swift transportation of tobacco from the regional floors to Harare.
Despite challenges in the local market, the company remains optimistic that 2024 will yield positive results and is on track to achieve its budget.
Despite a smaller tobacco crop output expected this season, Unifreight expects to move over 30 percent more volume from this sector after securing additional merchants in 2024.
In a statement accompanying financial results for the year to December 2023, board chairman Mr Peter Annesley said he expects the enhanced fleet size to generate healthier turnover going forward and mitigate sizeable fixed overheads the business carries.
“Our growth is underpinned by quality contracts, which we have been able to execute following the completion of the fleet expansion project in 2023. We have successfully secured a larger share of the tobacco market and now transport over 20 percent of the total Zimbabwean tobacco crop,” said Mr Annesley.
According to Unifreight, the financial year was negatively impacted by a challenging economic environment owing to the substantial depreciation of the Zimbabwe dollar.
The depreciation of the previous currency, the Zimbabwe dollar, led to the introduction of the Zimbabwean Gold (ZiG) in April 2024.
“Despite a challenging first quarter which was marked by subdued volumes due to the introduction of the new Zimbabwean Currency, the ZiG, we remain optimistic about Unifreight’s future,”
The company said made over us$1,3 million during the first quarter, as it continues focusing on delivering positive results and protecting shareholder value.
It intends to continue investing in smaller FAW28 290hp and FAW8 140hp trucks with volumetric configurations to better serve the local market at lower running costs per kilometre.
This strategy is aligned with cost containment and cross-border strategy and is proving to be an effective model.
In 2020, Unifreight 2020 disposed of two subsidiaries to Zimplow Holdings for equity as the company sought to transform its illiquid investments into tradable ZSE shares.
Operationally, Unifreight posted a profit of $192 billion (Zimbabwe dollar) as the company also implemented cost containment strategies.
The transport and logistics firm declared a final dividend amount of US$200 000 for the year at US$0,001878 per share and ZiG 1 344 000 at ZiG0,012623 per share.
-herald
