Pioneer remains in the red

HARARE - Zimbabwe Stock Exchange-listed transport and logistics group Pioneer Corporation Africa (Pioneer) remains in the red, posting a $562 000 loss after tax in the year to December 2012.

The group posted a $291 000 profit in prior comparable period.

During the period under review, revenue remained unchanged at $26,6 million compared to $26,4 million in 2011.

Operating profit slumped to $37 000 from $236 000.

“Net finance cost of $245 000 mainly due to recapitalisation also contributed to the loss position. This negative performance is set to change in 2013 after implementation of appropriate strategies to turn around the business,” said Chingoka.

He said foreign subsidiaries continued to be the group’s cash cow accounting for 70 percent of total revenue and realising an operating profit of $727 000 in 2012.

Pioneer’s foreign subsidiaries include South Africa-based PXL Freight & Logistics and Mavambo Coaches.
It also operates Pioneer Clan in Botswana.

“Strategic contracts with blue chip companies in South Africa to move freight into Zimbabwe and the region contributed to consistent revenue performance in 2012,” Chingoka said.

“Local operations did not perform up to expectations despite revenues increasing significantly compared to 2011 due to the challenging operating environment.”

Chingoka pointed out that the group’s passenger transport business operations continued to be affected by depressed bus fares due to prevailing economic challenges, despite maintaining a strong brand in the market.

“The passenger division now operates pre-dominantly new buses due to the ongoing recapitalisation drive which has resulted in improved operational efficiencies,” said Chingoka.

The acquisition of Unifreight operating assets by Pioneer in August 2011 is yet to be finalised once it is approved by one remaining regulatory authority, thus its unaudited financial results were not included in the audited results.

“Unifreight recorded an unaudited operating profit of $508 811 in 2012. Once this transaction is approved by the remaining regulatory authority, the new combined group will double its revenue base,” said Chingoka.

He said the group’s restructuring initiative which began 18 months ago is expected to result in enhanced performance.

“The ongoing recapitalisation of the business will result in improved operational efficiencies and strong group brands for our customers,” said Chingoka, adding that a structured cost reduction drive was being implemented to ensure viable profit margins are achieved during the course of 2013.

He said the group had clinched strategic contracts in Botswana and Zambia to transport minerals. - Business Writer

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