Total Transport & Logistics Solutions
Abridged Audited Financial Results
for the year ended 31 December 2022
Corner OrmeWillow Roads, New Adbernnie Harare P.O. Box 772 Harare, Zimbabwe, Tel: +263 8677000777, Website:www.unifreight.co.zw
Chairman's Statement
Overview 2022 was both a challenging year as well as year of change for Unifreight. While a number of macro-economic changes to the operating environment weighed down performance, there were also a number of positive developments that will see Unfreight grow from strength to strength.
The Zimbabwe Dollar depreciated substantially during the first half of 2022 which was addressed by raising the bank policy lending rate from 80% to 200% p.a. This immediately halted the currency depreciation but created a loan : deposit ratio retraction effectively lowering the liquidity in the market as industry moved to re-pay loans as quickly as possible. The resultant low loan: deposit ratio affected many businesses cash flow including Unifreight's.
Amongst the challenging macro-economic conditions Unifreight managed to secure a very attractive instalment sale agreement from a foreign creditor resulting in the re-capitalisation of 50 brand new FAW 380hp prime movers with 50 AFRIT taut-liner trailers. This substantial re-capitalisation will go a long way towards diluting the fixed cost overhead of the business.
FINANCIAL PERFORMANCE SUMMARY
The Group's financial results and the commentary have been prepared on an inflation-adjusted basis as required by IAS 29 "Financial Reporting in Hyperinflationary Economies". Financial statements prepared under the historical cost convention have only been presented as supplementary information. The Directors would like to advise users to exercise caution on their use of these audited abridged consolidated financial statements, due to the material and pervasive impact of the technical difficulties of reporting under International Accounting Standard (IAS) 29.
The group made a loss of (ZWL1.50b) at FY2022 which was largely driven by the Group's shareholding in
Zimplow which declined by (ZWL 2.16b) during 2022 driven by the inflation adjusted re-valuation of historical value. Revenue from continuing operations grew by 31% to ZWL 14.4b. However EBIT reduced by (58%) on the back of a 306% increase in financial costs for 2022. Our balance sheet grew from ZWL13.1b to ZWL18.6b due to the re-capitalisation of the fleet.
DIVIDEND DECLARATION
The Directors have decided not to declare a dividend for the period under review as they continue to assess the economic environment.
OUTLOOK
The Group is optimistic about the future and will drive growth through increased capacity availability as well as improved efficiencies. The additional 50 trucks were long overdue with the market readily availing additional volume to Unfreight.
APPRECIATION
On behalf of the Board, I wish to express my sincere gratitude and appreciation to our customers, business partners, and our valued shareholders for their confidence in us, which will be deservedly rewarded over time. I would also like to extend my gratitude to the Unifreight Board of Directors, employees, management, and executive team for their passion, commitment, and dedication to achieving a high-performance culture and ensuring Unifreight continues to grow.
ON BEHALF OF THE BOARD
Peter Annesley Chairman
Auditor's Statement
These abridged financial results derived from the audited consolidated inflation adjusted financial statements of Unifreight Africa Limited and its subsidiaries "the Group" for the financial year ended 31 December 2022, should be read together with the complete set of audited consolidated inflation adjusted financial statements of the Group, for the year ended 31 December 2022, which have been audited by Grant Thornton Chartered Accountants (Zimbabwe) and the auditor's report signed by Farai Chibisa, Registered Public Auditor 0547. A qualified opinion has been issued on the audited consolidated inflation adjusted financial statements of the Group, for the year then ended. A qualified opinion was issued regarding non-compliance with the requirements of the following:
• International Accounting Standard (IAS) 21 - The Effects of Changes in Foreign Exchange Rates;
• International Accounting Standard (IAS) 29 - Financial Reporting in Hyperinflationary Economies;
• International Accounting Standard (IAS) 2 - Inventories;
• International Financial Reporting Standard (IFRS 11) - Joint Arrangements,
International Accounting Standard (IAS 28) - Investments in Associates and Joint Ventures; and
• International Financial Reporting Standard (IFRS) 13 - Fair Value Measurement with respect to fair valuation disclosures for Investment Property for the prior year.
The auditor's report includes a section on key audit matters outlining matters that, in the auditor's professional judgement, were of most significance in the audit of the consolidated inflation adjusted financial statements. The key audit matter was with respect to revenue recognition. The auditor's opinion is not modified in respect of this matter.
24 March 2023
The auditor's report on the consolidated inflation adjusted financial statements and the full set of the audited consolidated inflation adjusted financial statements, is available for inspection at the company's registered office and the auditor's report has been lodged with the Zimbabwe Stock Exchange.
ABRIDGED AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 Dececember 2022
ASSETS
Non current assets Vehicles and equipment Investment properties Investment in equity instruments
Right of use of asset Intangible assets
Current assets Inventories Income tax asset
Trade and other receivables Cash and cash equivalents
TOTAL ASSETS
EQUITY AND LIABILITIES
Equity
Share capital Share premium Non-distributable reserve Fair value reserve for financial assets at FVOCI Equity component of shareholders loans Retained earnings
Non current liabilities Loans and borrowings Lease liability Deferred tax liabilities
Current liabilities
Trade and other payables Income tax payable Lease liability
Loans and borrowings
TOTAL EQUITY AND LIABILITIES
ABRIDGED AUDITED CONSOLIDATED STATEMENT
2022 ZWL 000 Historical
2021 ZWL 000 Historical
OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 31 December 2022
Revenue Operating costs Movement in expected credit losses
Dividend received Other operating income Earnings before interest, tax, depreciation and amortisation (EBITDA)
Finance costs Depreciation Monetary gain/ (loss)
Profit before taxation Income tax expense/(credit)
Net profit for the yearOther comprehensive income to be reclassified to profit or loss in subsequent periods:
Net (loss)/gain on equity instruments designated at fair value through other comprehensive income Other comprehensive (loss)/income for the year, net of tax
Total comprehensive (loss)/ income for the year, net of tax
Earnings per share
- Basic (loss)/earnings for the year attributable to ordinary equity holders of the parent (cents)
- Diluted (loss)/earnings for the year attributable to ordinary equityholders of the parent (cents)
- Headline (loss)/earnings for the year attributable to ordinary equity holders of the parent (cents)
ABRIDGED AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2022
Balance as at 1 January 2021
1,148,848
168,349 18,193 810,258 50,548 1,500
528,836
183,669
300
320,128
24,739
1,677,684
1,206,415
1,065 2,060 46,356 476,994
8,931 671,009
179,941 - 154,020 25,921
291,328
240,459 -
7,013
43,856
1,677,684
Profit for the year
Net gain on equity instruments designated at fair value through other comprehensive income Dividend
Balance as at 31 December 2021
Balance as at 1 January 2022
Profit for the year
Net loss on equity instruments designated at fair value through other comprehensive income Balance as at 31 December 2022
Attributable to equity shareholders of the parentShare capital Inflation AdjShare premium Inflation AdjNon-distributable reserves Inflation Adj Fairvalue reserve Equity portion of of financial Shareholders loans assets at FVOCI Inflation AdjRetained Earnings Inflation Adj ZWL 000 ZWL 000 ZWL 000 ZWL 000 ZWL 000 ZWL 000 | |||||
163,968 - - - | 317,178 - - - | 5,577,707 - - - | - - 1,251,234 - | 1,375,070 - - - | 144,105 1,995,936 - (28,931) |
163,968 | 317,178 | 5,577,707 | 1,251,234 | 1,375,070 | 2,111,110 |
163,968 - - | 317,178 - - | 5,577,707 - - | 1,251,234 - (2,160,296) | 1,375,070 - - | 2,111,1120 652,556 - |
163,968 | 317,178 | 5,577,707 | (909,062) | 1,375,070 | 2,763,666 |
Fairvalue reserve of financial assets at FVOCI
Share capital Inflation AdjShare premium Inflation AdjNon-distributable reserves Inflation Adj
Equity portion of Shareholders loansRetained
Inflation Adj
Earnings Inflation Adj
ZWL 000 163,968 -
ZWL 000 317,178 -
ZWL 000 5,577,707 -
ZWL 000
ZWL 000 1,375,070 -
ZWL 000
- -
144,105 1,995,936
- - 163,968
- - 317,178
- - 5,577,707
1,251,234 - 1,251,234
- - 1,375,070
-
(28,931) 2,111,110
163,968 -317,178 -
5,577,707 -1,251,234 -1,375,070 -2,111,1120 652,556
-
-
-
(2,160,296)
-
-
163,968
317,178
5,577,707
(909,062)
1,375,070
2,763,666
Total
Equity Inflation Adj
ZWL 000 7,578,028 1,995,936
1,251,234
(28,931) 10,796,267 10,796,267 652,556
(2,160,296)
9,288,527
ABRIDGED AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2022
Net cash (utilised)/ generated from operating activities
Cash (utilised)/ generated from operations
Dividend paid
Interest paid Taxation paid
Net cash utilised in investing activities
Purchase of vehicles and equipment to increase operations
Proceeds from sale of property, vehicles and equipment Dividend received
Net cash generated from financing activities
Proceeds from borrowings
Payment of deferred consideration Principal payment of lease liabilities Repayments of borrowings
(Decrease)/increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of currency translation on cash and cash equivalents Effects of inflation
Cash and cash equivalents at end of year
2022 Inflation Adj ZWL 000
2021 Inflation Adj
ZWL 000
637,573
883,320 (28,931)
(152,849) (63,967)
(279,350)
(321,203)
27,752 14,101
21,609
260,958
(773) (113,205)
(125,369)
379,833
279,763 23,800 (598,354)
85,042
NOTES TO THE ABRIDGED AUDITED CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 December 2022
General Information
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 main activities include inter-city freight consolidations, the distribution of general goods, and a courier service.
The Company is incorporated in Zimbabwe. Other entities in the Group are incorporated in Botswana. The company is listed on the Zimbabwe Stock Exchange.
These Group consolidated financial statements are presented in Zimbabwean Dollars and were authorised for issue by the Board of Directors on 24 March 2023.
Basis of preparation
The consolidated financial statements of the Group have been prepared in accordance with International 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.
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 has been restated for changes in the general purchasing power of the Zimbabwe dollar and as a result are 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 Historical Consolidated Statement of profit or Loss and other comprehensive income and Consolidated Statement of financial position has been included only as supplementary information.
Inflation adjustment
The Public Accountants and Auditors Board (PAAB) in their circular 01/19 communicated that the factors and characteristics to apply IAS 29, Financial Reporting in Hyper-Inflationary Economies had been met in Zimbabwe. The pronouncement require that entities reporting in Zimbabwe apply the requirements of IAS 29 with effect from 1 July 2019.
IAS 29 requires that the financial statements prepared in the currency of a hyperinflationary economy be 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 monthly Consumer Price Indices as published by the Reserve Bank of Zimbabwe. The following factors were applied:
Period / Month
Prior year
Jan-22
Feb-22
Mar-22
Apr-22
May-22
Jun-22
Accounting policies
Factor | Period / Month | Factor |
3.4376 | Jul-22 | 1.2506 |
3.2632 | Aug-22 | 1.1129 |
3.0499 | Sep-22 | 1.0755 |
2.8688 | Oct-22 | 1.0426 |
2.4828 | Nov-22 | 1.0242 |
2.0523 | Dec-22 | 1.0000 |
1.5703 |
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
The policies applied are consistent with those applied in previous years.
Trade and other receivablesCurrent
Trade receivables Receivables due from related parties
Less: provision for impairment
Prepayments 6,095,060 71,578
Trade receivables - net 1,935,839 669,726
Trade and other payables
Staff debtors VAT receivable Other debtors
Current
Trade payables Trade payables due
Accrued expenses 254,531 114,170
to related parties 189,659 126,340
Social security and other
statutory liabilities 186,620 108,403 1,777,495 826,602
Borrowings
Borrowings represent facilities for capital expenditure and working capital. The interest rates are between 10% and 205%.
Shareholder loans
Equity component of shareholders loansLoans and Borrowings
Finance cost
Finance cost comprises the following:
- Bank borrowings
- Consideration liability
- Leases liabilities
Capital expenditure
Acquisition of vehicles and equipment
Contingent liabilities
2022
2021
ZWL '000
ZWL '000
Inflation Adj
Inflation Adj
1,375,070 1,375,070 (1,375,070) (1,375,070)
-
6,051,446 150,759
6,051,446 150,759
60,712 13
70,033 92,124
621,131 152,849
1,335,314
321,203
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.
Subsequent events
There are no adjusting or non-adjusting events after the reporting date which have an effect on the financial position of the group as at the reporting date nor require disclosure in the financial statements.
Directors: P.J. Annesley (Chairman); R.E. Kuipers * (Chief Executive Officer); B.N. Ndebele; H. Crabbe; M. Kalweit
*Executive
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Unifreight Africa Ltd. published this content on 29 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 29 March 2023 08:35:11 UTC.