By ETimes
HARARE – UNIFREIGHT Africa delivered a strong set of results for the half-year ended 30 June 2025, underpinned by significant revenue growth and improved profitability.
Group revenue rose sharply to ZWG545.5 million, compared to ZWG164.5 million in the prior period, representing a 231.6% year-on-year increase. Management attributed this performance to the successful execution of its strategy to expand cross-border capacity and capture new trade flows on the Beira corridor. This impressive top-line growth demonstrates the strength of the company’s positioning in regional logistics markets.
EBITDA increased by 139.9% to ZWG100.9 million from ZWG42.1 million in June 2024, while profit before tax surged by 154% to ZWG51.6 million. Net profit after tax more than doubled to ZWG202.4 million, compared with ZWG 90.4 million in the prior year, representing growth of 123.9%. These results were supported by a substantial income tax credit of ZWG150.7 million, which boosted the bottom line. Without this once-off item, underlying profitability would have been less pronounced.
Margins, however, tell a more cautious story.
The EBITDA margin fell to 18.5% compared to 25.6% in June 2024, reflecting rising operating costs which grew by 237% year-on-year. The net profit margin stood at 37.1%, down from 54.9% in the prior year, once again highlighting the impact of extraordinary tax credits on reported earnings. This decline in margins suggests that while revenue expansion has been achieved, cost pressures remain significant and may constrain future profitability if not effectively managed.
Total assets declined by 10.3% to ZWG1.35 billion from ZWG1.50 billion in December 2024, largely due to a 19.2% reduction in vehicles and equipment. Equity remained broadly stable at ZWG886.3 million, but retained earnings increased sharply by 66.3% to ZWG507.7 million, reflecting the period’s profit growth. Borrowings reduced marginally by 3% to ZWG144.8 million, suggesting a degree of deleveraging, although finance costs rose almost 395% year-on-year due to elevated interest rates in the range of 12.15% to 13%.
Liquidity and cash flow trends raise some concerns.
Cash and cash equivalents fell by 65.5% to ZWG 14.5 million, down from ZWG42.2 million at year-end 2024. The group also recorded a net cash outflow from operating activities of ZWG5.8 million, compared to a positive inflow of ZWG57.5 million in June 2024. This was compounded by significant financing outflows of ZWG32.6 million, reflecting loan repayments and lease obligations, as well as investment in new fleet assets. These movements signal pressure on liquidity and the need for careful management of working capital and funding ahead of the planned fleet expansion to support the 2026 tobacco season.
Earnings per share reflected the strong headline results, with basic EPS rising to 194.53 cents from 76.71 cents in the prior year, representing a 153.6% increase. Headline EPS followed a similar trend at 194.43 cents, more than double the 76.52 cents reported in June 2024. This marks a substantial creation of shareholder value, albeit supported by extraordinary items.
Our thoughts: Unifreight Africa delivered a strong financial performance in the first half of 2025, marked by triple-digit revenue growth and enhanced profitability. However, declining operating margins, negative operating cash flows, and a fall in liquidity point to challenges beneath the surface. Furthermore, the reported results were subject to a qualified review conclusion by the auditors due to non-compliance with IAS 21 on foreign exchange rates, raising questions over the reliability of some figures. Going forward, investors should closely monitor the group’s ability to generate sustainable cash flows, manage debt servicing, and finance fleet expansion without overextending its balance sheet.
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