Harare, April 16, 2013 – The transport company, Pioneer, plans to acquire Unifreight, a development that may see it boosting its fortunes.
Although the deal got the approval of the Competition and Tariff Commission two years ago, it still had to get the nod from the Reserve Bank of Zimbabwe, the Zimbabwe Stock Exchange and the Indigenisation ministry.
Pioneer posted a poor set of financials showing an attributable loss of USD 0.9m, worsening by 133% year-on-year. Stagnant revenues, high costs structures as well as high finance costs resulted in the poor performance.
For the financial year 2012 Unifreight posted an operating profit of USD 0.5m.
“In our opinion, when approved the acquisition can potentially enhance Pioneer’s position and significantly improve the balance sheet,” said market analysts on Monday.
Operating margins for Pioneer shrunk to 0.1% from 1% resulting in operating profits declining by 84%. The local businesses were negatively impacted by the slow recovery in the local industry. Nonetheless, foreign subsidiaries reported a strong performance accounting for 70% of group revenue and posted an operating profit of USD 0.5m.
Cash generation improved with net cash generated from operations increasing 360% year-on-year to USD 1.9m. Net gearing improved to 57% from 142% as the group reduced borrowings.
The Passenger division operates pre-dominantly new buses.
New strategic contracts to move mining minerals were secured in Zambia and Botswana. Management expects the group to significantly turnaround in 2013 post the restructuring.