Almot Maqolo, Staff Writer 
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UNIFREIGHT Africa (Unifreight) says the suspension of import duty on basic commodities by the government could negatively impact its financial performance.
Authorities suspended import duty on basic goods for six months to address the ongoing price hikes. The transport and logistics firm said exchange rate instability negatively affects the ability of the formal retailer and manufacturer to compete with imported products from South Africa.
“As Unifreight relies heavily on business-to-business transport in the formal trading environment, any disruption to the formal sector is likely to have negative consequences within the Unifreight Africa business,” the company said in a trading update for the first quarter of 2023.
“The recent suspension of import duty and import value added tax on 11 different basic commodities is another disruption likely to have very negative consequences to industry and thus Unifreight.”
In the period, the company’s revenue increased by 29 percent to US$4,49 million from US$3,48 million in the comparative period.
“This was driven by an increase in available capacity as we took delivery of the first 75 of 100 new FAW JN5 380hp 6×4 tractor units, which have been paired with Afrit Tautliners,” Unifreight said.
The company’s expenditure was also 21 percent below budget as it rolled out a mass cost reduction exercise to great effect.
“The combination of increased top-line revenue growth with cost-cutting measures has resulted in earnings before interest, taxes, depreciation, and amortisation profit of US$771 000 for Q1 2023.
“This is 159 percent above budget and we expect the trend to continue for the remainder of the year.”
Unifreight said the 75 FAW units were operating effectively, averaging over 2,1 kilometres per litre, while conducting both short- and long-haul duties and their maintenance costs are around US$0.025 cents per km.
“Owing to the impressive performance of the FAW we will look to purchase a further 15 FAW 8 140hp FL (5 tonners) as well as 15 FAW 28 290hp FL (13 tonners),” it said.
“These assets will be used to replace and expand the current collection and delivery fleet.”
To safeguard shareholder value, the company is concentrating on achieving favourable outcomes in a challenging market environment.
“With another 100 FAWs added to the Unifreight fleet, fixed overheads will be diluted and the business will be able to continue from the fine first quarter trading performance.
“The group continues to closely monitor expenses and protect yield per KM. Currently, we are on track to achieve our forecast profit of US$2,9 million by FY2023,” the company said.
