Unifreight entices investor confidence

Logistics giant Unifreight Africa Limited on Thursday proposed quarterly dividend starting next year as a way to limit the dividend payment vulnerability to the effects of hyperinflation and to jumpstart investor confidence.

Chairman Peter Annesley told shareholders at the company’s annual general meeting yesterday that they are trying to make the dividend payments worthwhile.

“Due to the prevailing hyperinflation environment and in an effort to retain shareholder value the board of directors is proposing a quarterly dividend payment mechanism beginning in the financial year 2022.

“This will be done in line with the profits and business performance and declarations will be ratified at the respective meeting,” he said.

“This is not something that we are going to vote on, it is a statement that the board has made and the executive is fully aware of the key performance indicators and results areas to ensure that we sustain our cash flow and to continue to build confidence with our shareholders and our market in general.”

Some of the shareholders described the proposed new dividend payment strategy as “excellent”.

Approved was a final dividend of 42,26 cents per share for the year ended December 31, 2020.

Annesley said it is always difficult to address matters of the business for the year ended December 31, 2021. However, the company is buoyed by the massive infrastructure projects in the country mostly spearheaded by the Government as it presents Unifreight and its associates with exciting prospects.

Chief executive Rob Kuipers presented challenges facing the business with chief among them being foreign currency shortages.

“Our biggest challenge which is getting worse continues to be securing enough foreign currency for our foreign procurement needs and the moving exchange rate which requires constant review to keep up with the increasing costs,” said Kuipers.

Unifreight has embarked on a drive to establish fresh markets to mitigate forex shortages.

“We are still taking a view on cross border work in the region to earn additional foreign currency. However, the mileage that can be achieved is half of what we achieve running locally; margins are very thin,” he said.

The company is involved in the logistics business. It requires a lot of fuel to keep functioning. But, it has been met with a major blow of failing to access the cheap fuel sold in local currency.

“Our other big challenge right now is the availability of fuel which so far we are managing, but we are caught between a rock and a hard place where fuel is no longer available in and we are not

RTGS able to get any money from the auction for fuel,” said Kuipers.

While some formal businesses and SMEs are benefiting from the auction system, the demand for remains elevated,

USD fuelling parallel market exchange rates.

“So we are engaged with the Reserve Bank of Zimbabwe and National Oil Infrastructure Company ( NOIC) of Zimbabwe and anyone else to give help, but so far we are not winning. It’s not a good situation.”

On a monthly basis, the group requires about US$ 500 000 for spares and fuel.

Unfortunately the replacement of equipment which is all important, he said, fell behind schedule and with volatility of rates as well uncertainty.

“However we are now on track to replace that equipment,” he said.

Being able to keep our rates viable, he said, enough for our own customers to stay in business is also a challenge.

‘‘On e-commerce, the company has found a rental site at the race course to open its town hub from which it plans to run home deliveries.”

Unifreight is now the first company in Zimbabwe to be accredited with Road Transport Management Systems ( RTMS).

The company’s current picture, he said, is not great, but under the circumstances we are better than what we expected.

“What is disappointing is despite the dramatic increase in sales this year, we are up 47 percent on last year and 5 percent at the end of the budget,” he said.

Profit has remained fairly stagnant in the third quarter.

Revenue in terms is up 51 percent

USD on last year. Cumulative net profit as a percentage of revenue is sitting at 8 percent.

The endorsed that $5,78 million be

AGM paid as director’s fees for the past year as well as the re-appointment and remuneration of $10,94 million to Ernst and Young Chartered Accountants Zimbabwe for the past audit.

This year will be the final year for as

EY the auditors of the company since being appointed in 2012.