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HomeBusinessUnifreight Group Sees Robust Growth in Q1 2024 Amid Market Challenges

Unifreight Group Sees Robust Growth in Q1 2024 Amid Market Challenges

Zimbabwe Stock Exchange (ZSE) listed logistics company Unifreight Group has reported a substantial surge in its first-quarter trading volumes for 2024, marking a 58% increase from the previous year, which had itself seen a 135% rise from the year before.

Announcing the group’s 2024 first quarter update Chief Executive Richard Clarke attributed this consistent growth to strategic fleet expansion, increased capacities, and aggressive marketing efforts within the Full Truck Load (FTL) market segment.

“We have witnessed a substantial increase in Q1 volumes, up by 58% from the prior year, which itself was up by 135% from the year before. This consistent growth is a testament to our strategic fleet expansion and increased capacities.

“Our aggressive marketing efforts within the Full Truck Load (FTL) market segment have paid off, despite a 17% reduction in total yield per KM due to the nature of the segment. This reduction is offset by the increased volumes being moved,” Clarke said

He said Unifreight’s strategic focus on wholesale consumer goods has proven advantageous, particularly as this segment remains relatively unaffected by currency fluctuations.

“Our total revenue contributions have shifted from Less Than Load (LTL) towards FTL, with FTL’s contribution increasing from 29% in 2023 to 41% in 2024. Tobacco continues to be a key revenue driver. Most major merchants have chosen Swift for the safe and reliable transportation of their tobacco from the regional floors to Harare

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“Despite a smaller tobacco crop trending towards 220 million kilograms for the season, we anticipate moving over 30% more volume from this sector after securing additional merchants in 2024,” Clarke said

He praised the reliability and cost-efficiency of the FAW28-380FT units in their fleet, highlighting their superior performance compared to other models.

Unifreight according to Clarke, plans to acquire an additional 60 FAW28-380FT units by the end of the year to further enhance its operational capacity.

However, he said operating within Zimbabwe presents significant cost challenges.

“Regionally, Zimbabwean fuel is the most expensive, with our pump price at USD1.68 compared to USD1.11 in Zambia. Vehicle registration is also significantly higher at USD 1,560 versus only USD 132 in Zambia. These exorbitant costs make operating a cross-border fleet in Zimbabwe less attractive.

“Duties levied on diesel currently stand at USD 0.427c, and 25% of export proceeds are converted into ZiG, which cannot be freely converted back into USD at the controlled exchange rates published by the Reserve Bank. Luckily Unifreight has a flexible business model which allows us to change the number of assets running cross border as we need,” he noted

Despite these challenges, Unifreight remains optimistic about its prospects for the remainder of the year. The company has already generated over ZWL 13 million in Q1 2024.

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“The Board, Executive, and Management are focusing on delivering positive results and protecting shareholder value,” Clarke said.

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