Unifreight eyes cross-border business

Source: Unifreight eyes cross-border business –Newsday Zimbabwe

LISTED transport and logistics firm Unifreight Africa Limited has revealed plans to diversify and de-risk the business by actively pursuing cross-border and contract haulage.

The company, which is listed on the Zimbabwe Stock Exchange, said growing revenue streams would give it access to foreign currency.

“In addition to the above, Unifreight will aim to diversify and de-risk the business by actively pursuing cross-border and contract haulage,” Unifreight chief executive officer Richard Clarke said in a statement accompanying the group’s 2022 annual report.

“We aim to invest in and grow a dedicated fleet to over 100 full-time cross-border assets. The benefits of growing these revenue streams is 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.”

He added: “We are also going to 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 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.”

Although the group made a loss of $1,32 billion in 2022 largely driven by the group’s shareholding in Zimplow which depreciated by $2,16 billion, Clarke said there had been a number of encouraging statistics which would help the business going forward.

Repairs and maintenance for example fell dramatically from 12,5% of revenue to under 7% by the end of 2022, he noted. 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 said.

The CEO said tobacco had traditionally been an area where Unifreight had dominated the local transport market and 2022 was no different with Swift transporting 25 million kilogrammes of tobacco during the 2022 marketing period.

With the new fleet, Swift have forecast increasing its market share by 70% and target to carry over 40 million kg during the 2023 season.

“This is a monumental jump which will ultimately boost profitability for the company,” he noted.

After buying 100 new trucks, he said Unifreight would continue its recapitalisation drive by investing further into the new fleet. Clark said the current collection and delivery fleet is nearing retirement age and they would procure about 25 trucks.

Revenue from continuing operations grew by 31% to $14,4 billion.