Pioneer sinks into the red

The group’s operating profit also decreased by 84 percent to end the period under review at US$37 000, down from US$236 000 the previous year.
In a statement accompanying the results, the group attributed this to stagnant revenue inflows that maintained the same levels from prior period to end the year at US$26,6 million among other factors.

“Stagnant revenues and high cost structures resulted in the loss-making position, while the challenging environment and limited liquidity that has been prevailing in the country is also to blame,” read the statement.

Net finance costs amounted to US$245 000 which also affected the group’s profitability.
“Net finance cost, mainly due to recapitalisation also contributed to the loss position though we expect this negative performance to change this year after implementation of appropriate strategies to turn around the business,” added the statement.

Due to this ongoing recapitalisation, the passenger division now operates predominantly new buses and this has resulted in improved operational efficiencies.
However, Pioneer’s foreign subsidiaries continue to be the flagship of the group accounting for 70 percent of the group’s revenue and these include PXL Freight and logistics South Africa, Pioneer Clan Botswana and Mavambo Coaches South Africa.

In a bid to restore it’s position in the consolidated business, Pioneer acquired Unifreight Swift, which is also in the transport and logistics sector, for US$7,2 million.

“The purchase of Unifreight Limited operating assets by Pioneer Corporation Africa Limited was approved in August 2011 and the ZSE together with the Competition and Tariff Commission have approved the transaction, so we now await approval from one remaining regulatory authority,” the group said.

To that effect financial results for 2012 for Unifreight Limited have not been incorporated into these results.However, it posted an unaudited operating profit of US$508,811 during the period under review.

After approval of the acquisition by the remaining regulatory authority has been granted, the new combined group is expected to double its revenue base while the business restructuring initiatives underway are expected to yield positive and improved operational efficiencies.

“We have put in place cost reduction measures that will ensure viable profit margins are achieved in 2013 and beyond and as such we forecast positive performance for 2013,” said the group.