Unifreight Africa : HY22 Results & Audit Opinion

Reviewed Abridged

Consolidated

Financial Results

for the half year ended 30 June 2022

Total Transport & Logistics Solutions

Corner Orme and Willow Road, New Adbernnie Harare P.O. Box 772 Harare, Zimbabwe, Tel: [phone], Website: www.unifreight.co.zw

Chairman's Statement

Overview

The company has had a positive start to the year, with half year volumes 19% ahead of last year and 5% ahead of Budget. The fundamentals are sound and the business is on a solid footing.

Financial performance

We are very pleased to be able to report an inflation adjusted earnings before interest tax and depreciation of ZWL396 million which is 76% above prior ZW$225 million. The Group has been monitoring costs as margins continued to be eroded and this has resulted in this healthy increase from prior year.

Cumulative Q2 Sales in real terms were on a par with last year but 10% behind budget indicating that we are losing ground on yield, however we have been able to contain costs within budget and maintain a healthy bottom line.

Our cumulative net profit as a percentage of revenue is sitting at 10.9% which is above industry average, but unfortunately below expectations.

Outlook

The Board is happy with progress achieved during the period under review, particularly the acquisition of new revenue earning equipment, and the growth in the balance sheet in real terms. We are also optimistic with regard to the positive changes in the monetary policy, with the view that if implemented correctly, it is in the favour of formal business flourishing, while the playing field is leveled to include the informal market in the economy. We are rigorously pursuing new revenue streams, whilst maintaining and strictly monitoring costs and are confident that we will end 2022 with a favourable set of results.

Dividend

The Directors did not declare an interim dividend for the half year.

Appreciation

On behalf of the Board, I would like to extend my sincere appreciation to our valued stakeholders. I am grateful to my fellow board members, management and staff for their continued commitment and dedication.

Peter Annesley

Chairman

28 September 2022

REVIEWED ABRIDGED STATEMENT OF FINANCIAL POSITION as at 30 June 2022

	Reviewed		Audited		Unaudited
	June		Dec		June		Dec
	2022		2021		2022	2021
	ZW$ 000		ZW$ 000		ZW$ 000		ZW$ 000
	Inflation Adj	Inflation Adj		Historical		Historical
ASSETS
Non current assets	5,760,766		7,199,798		1,447,995	1,148,848
Property, vehicles
and equipment	2,259,823			2,823,077		201,918		168,349
Investment property	1,577,140			1,604,022		18,100		18,193
Investment in equity instrument	717,654			1,773,797		717,654		810,258
Right of use of asset	1,059,081			851,831		508,823		150,548
Intangible assets	147,068			147,071		1,500		1,500
Current assets	1,527,437			1,179,607		1,514,102		528,836
Inventories	280,996			423,977		267,661		183,669
Trade and other receivables	1,216,027			700,816		1,216,027		320,128
Income tax asset	-			657		-		300
Cash and cash equivalents	30,414			54,157		30,414		24,739
TOTAL ASSETS	7,288,203		8,379,405		2,962,097	1,677,684
EQUITY AND LIABILITIES
Equity	5,220,685		6,875,413		1,545,817	1,206,415
Share capital	104,424			104,424		1,065		1,065
Share premium	201,984			201,984		2,060		2,060
Non distributable reserve	3,552,064			3,552,064		46,356		46,356
Fair value reserve for
financial assets at FVOCI	(238,193)			796,826		386,242		476,994
Shareholders loans	875,690			875,690		8,931		8,931
Retained Earnings	724,716			1,344,425		1,020,673		671,009
Non current liabilities	952,978			866,226		387,218		179,941
Lease liability	359,892			337,176		359,891		154,020
Deferred tax liabilities	593,086			529,050		27,327		25,921
Current liabilities	1,114,540		637,766		1,109,552	291,328
Trade and other payables	638,919			526,406		638,919		240,459
Income tax payable	77,683			-		72,693		-
Lease liability	18,645			15,352		18,647		7,013
Loans and borrowings	379,293			96,008		379,293		43,856
TOTAL EQUITY AND
LIABILITIES	7,288,203			8,379,405		2,962,097		1,677,684

REVIEWED ABRIDGED CONSOLIDATED STATEMENT

OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the half year ended 30 June 2022

		Reviewed		Unaudited
		June	June		June			Dec
		2022		2021		2022	2021
		ZW$ 000	ZW$ 000		ZW$ 000			ZW$ 000
		Inflation Adj	Inflation Adj		Historical			Historical
Revenue	4,520,691		3,484,112		3,114,737	1,120,273
Operating costs	(4,245,203)		(3,287,954)		(2,771,490)	(1,004,388)
Movement in expected
credit losses	-		(150,828)		-	(51,731)
Other operating income	120,222		179,714		192,954	35,619
Earnings before interest,
tax, depreciation and
amortisation (EBITDA)	395,710		225,044		536,201	99,773
Finance costs	(114,614)		(9,194)		(78,689)	(9,553)
Depreciation	(311,874)		(416,404)		(27,358)	(8,584)
Loss on net monetary position	(424,695)		(1,354,751)		-		-
(Loss)/profit before taxation	(455,473)		(1,555,305)		430,154	81,636
Income tax (expense)/credit	(164,236)		1,014,755		(80,490)		(22,859)
(Loss)/profit for the period	(619,709)		(540,550)		349,664	58,777
Other comprehensive
income not to be
reclassified to profit
or loss in subsequent
periods:
Net loss on equity instruments
designated at fair value
through other comprehensive
income		(1,035,019)		-		(90,752)	-
Other comprehensive
loss for the period, net
of tax		(1,035,019)		-		(90,752)		-
Total comprehensive
loss for the period, net
of tax		(1,654,728)		(540,550)		258,912	58,777
Earnings per share
-Basic earnings for the period
attributable to ordinary equity
holders of the parent (cents)	(1,554.11)		(507.68)		243.17	55.20
-Diluted earnings for the period
attributable to ordinary equity
holders of the parent (cents)	(1,554.11)		(507.68)		243.17	55.20

REVIEWED ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the half year ended 30 June 2022

																Inflation Adjusted
									Share		Share	Non-distributable	Fairvalue reserve	Equity portion of		Retained						Total
									capital		premium		reserves	of financial	Shareholders loans		Earnings					Equity
									ZW$ 000		ZW$ 000		ZW$ 000		ZW$ 000	ZW$ 000		ZW$ 000					ZW$ 000
	Balance as at 1 January 2021			104,424		201,984		3,552,064		-		875,690		121,176		4,855,339
	Loss	for the period				-		-		-		-				-		(540,550)				(540,550)
	Balance as at 30 June 2021				104,424		201,984		3,552,064		-		875,690		(419,374)			4,314,789
	Balance as at 1 January 2022			104,424		201,984		3,552,064		796,826		875,690		1,344,425		6,875,413
	Loss	for the period				-		-		-		-				-		(619,709)				(619,709)
	Net loss on equity instruments designated at fair value
	through other comprehensive income			-		-		-	(1,035,019)				-		-		(1,035,019)
	Balance as at 30 June 2022				104,424		201,984		3,552,064		(238,193)		875,690		724,716		5,220,685
														Accounting policies
REVIEWED ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS				The consolidated financial statements have been prepared in accordance with International Financial Reporting
for the half year ended 30 June 2022									Standards (IFRS) as issued by the International Accounting Standards Board.
									Reviewed		The policies applied are consistent with those applied in previous years.
									June		June
								2022		2021		Trade and other receivables						Trade and other payables
								ZW$ 000		ZW$ 000						June	June							June			June
								Inflation Adj		Inflation Adj						2022		2021							2022	2022
														ZW$ '000	ZW$ '000							ZW$ '000			ZW$ '000
																		Inflation Adj							Inflation Adj
Net cash generated from operating activities			285,992		1,218,715		Current							Current
Cash generated from operations			400,606			1,327,236		Trade receivables			1,053,855		549,091		Trade payables	152,359	304,208
					Receivables due from							Trade payables due
Interest paid						(114,614)			(9,194)		related parties			72,601		17,487		to related parties	65,044	80,458
Taxation paid						-			(99,327)		Less: provision for impairment		(87,626)		(140,074)	Accrued expenses	259,097	72,707
														Trade receivables - net			1,038,830		426,504		Social security and other
																						statutory liabilities	162,419			69,033
Net cash generated from investing activities			96,885		42,967		Prepayments			19,638		45,583							638,919	526,406
Purchase of property, vehicles and equipment to									Staff debtors			5,338		409
								VAT receivable			106		1,582
increase operations				(111,415)			(11,622)
						Other debtors			152,115		226,738
Proceeds from sale of property, vehicles and equipment	208,300			54,589						1,216,027		700,816
Net cash generated/ (utilised) in financing activities	429,030			(2,826)		Borrowings
Proceeds from borrowings				544,084			37,903		Borrowings represent facilities for capital expenditure and working capital. The interest rates is 65%.
Payment of deferred consideration			-			(44)
	Principal payment of lease liabilities			(9,133)			(2,659)										June		Dec
														2022		2021
	Repayments of borrowings				(105,921)			(38,026)
															ZW$ '000	ZW$ '000
																						Inflation Adj	Inflation Adj
	Increase in cash and cash equivalents			811,907		1,258,856		Shareholder loans							875,690		875,690
	Cash and cash equivalents at beginning of period			54,157		178,153		Equity component of shareholders loans			(875,690)		(875,690)
	Net foreign exchange differences			2,436		10,272										-			-
					Loans and Borrowings						379,293			96,008
	Effects of inflation on cash and cash equivalents			(838,086)		(1,008,504)
													379,293		96,008
	Cash and cash equivalents at end of period			30,414		438,777		Capital expenditure
														Capital expenditure comprises the following:
																						June		June
																						2022		2021
	NOTES TO THE REVIEWED ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS									ZW$ '000	ZW$ '000
									Inflation Adj	Inflation Adj
	for the half year ended 30 June 2022
									Capital expenditure
	General Information												Acquisition of property,
												vehicles and equipment						111,415		11,622
	Unifreight Africa Limited (formerly Pioneer Corporation Africa Limited) was incorporated in Zimbabwe in 1970.
	It is the holding company of a Group of companies primarily involved in the road transport industry whose	Approved capital commitments
	main activities include inter-city freight consolidations, the distribution of general goods, and a courier service.
	at the date of approval
	The Company is incorporated in Zimbabwe. Other entities in the Group are incorporated in Botswana. The	of financial results							-		-
	company is listed on the Zimbabwe Stock Exchange									Contingent liabilities
	These Group consolidated financial statements are presented in Zimbabwean Dollars and were authorised	The group is a defendant in various labour disputes with former employees. The cases are at various stages.
	The total being claimed in all these cases is ZW$ 895,800.
	for issue by the Board of Directors on 29 September 2022.
	Basis of preparation										Subsequent events
										There are no adjusting or non-adjusting events after the reporting date which have an effect on the financial
	The consolidated financial statements of the Group have been prepared in accordance with International
	position of the group as at the reporting date nor require disclosure in the financial statements.
	Financial Reporting Standards (IFRS) as issued by the international Accounting Standards Board (IASB).
	The accounting policies are applied consistently throughout the Group. The consolidated financial statements
	are presented in Zimbabwean dollars (ZW$) and all values are rounded to the nearest 1 000 dollars except
	where otherwise stated.											Auditor's Statement
	The consolidated financial statements are initially prepared under the historical cost convention as restated
	for the changes in the general purchasing power of the functional currency for the purposes of fair presentation
	in accordance with IAS 29 (Financial Reporting in Hyperinflationary Economies). This historical cost information		These Abridged Consolidated Financial Statements have been reviewed by Grant Thornton Chartered
	has been restated for changes in the general purchasing power of the Zimbabwe dollar and as a result are
		Accountants (Zimbabwe).
	stated in terms of the measuring unit current at the end of the reporting period. Accordingly, the inflation
	adjusted consolidated financial statements represent the primary financial statements of the Group.		The auditors have issued a qualified review conclusion regarding non-compliance with the requirements of
	Inflation adjustment													the following:
	The Public Accountants and Auditors Board (PAAB) in their circular 01/19 communicated that the factors and		• International Accounting Standard (IAS) 2 - "Inventories",
	characteristics to apply IAS 29, Financial Reporting in Hyper-Inflationary Economies had been met in		• International Financial Reporting Standard (IFRS 11) - "Joint Arrangements", and
	Zimbabwe. The pronouncement require that entities reporting in Zimbabwe apply the requirements of IAS		• International Accounting Standard (IAS 28) - "Investments in Associates and Joint Ventures."
	29 with effect from 1 July 2019.
	IAS 29 requires that the financial statements prepared in the currency of a hyperinflationary economy be		The review conclusion on the Abridged Consolidated Financial Statements is available for inspection at the
		company's registered office.
	stated in terms of the measuring unit current at the balance sheet date and the corresponding figures for the
	previous period be stated in the same terms. The restatement has been calculated by means of conversion
	factors derived from the consumer price index. The Group used the inflation adjustment factors derived from		The engagement partner on the review engagement resulting in this independent review conclusion is Farai
	the monthly Consumer Price Indices as published by the Reserve Bank of Zimbabwe. The following factors		Chibisa (PAAB Number 0547).
	were applied:
	Period / Month	Factor	Period / Month	Factor
	Jun-21		2.9156		Mar-22	1.8269
	Dec-21		2.1892		Apr-22	1.5811
	Jan-22		2.0781		May-22	1.3070
	Feb-22		1.9423		Jun-22	1.0000

Directors: P.J. Annesley (Chairman); R.E. Kuipers * (Chief Executive Officer); B.N. Ndebele; H. Crabbe; M. Kalweit *Executive