Unifreight braces for a tough 2019

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LOGISTICS giant Unifreight Africa (Unifreight) says it is bracing itself for a tough 2019 despite registering decent progress following its restructuring exercise a few years ago.
This comes as the country’s intensifying foreign currency shortages — caused by a persistent trade deficit, waning industry and confidence issues — have threatened the viability of businesses in various sectors in the ailing economy of the southern African country.
“Our biggest challenge is earning enough foreign currency for our foreign procurement needs, and the moving exchange rate, which requires constant review of our rates and pricing to keep up with the increase in costs,” Robert Kuipers, Unifreight’s chief executive, told shareholders at the company’s annual general meeting.
“Our other challenge is the availability of fuel, which so far has been sufficient although stocks are low and we anticipate that we will be required to pay for fuel in foreign currency going forward,” he said.
In 2015, the logistics group was restructured to reflect a “one-company-one-focus” business providing transport and logistics solutions.
And in 2016, it disposed of its subsidiary PXL Freight and Logistics and sold off the local Pioneer Services as part of an empowerment deal with its workers, all of which was meant to solely focus the company’s efforts on Swift and Bulwark operations.

Over the two-year period, the company also laid off about 200 employees and effected pay cuts on the remaining staff.
Regressing from a solid profit after tax of $1,47 million, off $22,96 million revenues for the year ended December 31, 2017, the company reported a profit of $550 000 for the year ended December 2018.
“While we are happy with the profit posted for the year, I do not feel that the income statement is a true reflection of our performance in real terms, this is due to the fluctuating exchange rate,” said Kuipers.
“We effectively grew the balance sheet in real terms by US$4,5 million, which is corroborated by taking a view of the cash flow statement saying in real terms we purchased US$3,2 million worth of equipment and we paid a net of just under $1 million worth of debt that had been used to purchase equipment at 1:1.
“Unlike most other companies that posted much higher profits on the back of foreign currency debt which will erode future profits if the exchange rate moves, we have no foreign borrowings,” he said.
Kuipers noted that during the first half of 2019, the group’s total volumes remained consistent with last year with a marked improvement of 24 percent increase in less than truckload volumes “as part of our ongoing strategy to increase yield in dollars per kg on existing capacity while we continue to grow”.
Meanwhile, the company said it is not threatened by the changes in the transport industry.
“We continue to watch the horizon for the threat of ubernisation and disruption to our business, which we can already see taking place with likes of VAYA. We believe that they can complement our business as opposed to threatening it,” Kuipers said.