NRZ made $277 billion profit in 2022

The National Railways of Zimbabwe (NRZ) has seen a comprehensive profit of ZWL277 billion in the last financial year, an impressive swing from the previous year which saw the state-owned enterprise posting a net loss of ZWL3.4 billion. This was revealed during NRZ Annual General Meeting on Monday, Bulawayo.

Furthermore, NRZ General Manager, Respina Zinyanduko said the company’s bush operations were hampered by decline in tonnages and resultant revenues generated thereof. However, the company’s fortunes were reversed in the last financial year.

“The company continued to operate below break-even point due to decline in tonnages and resultant revenues generated thereof, however during the period under review, the company realised a comprehensive profit of ZWL277 billion compared to a net loss of ZWL 3.4 billion in the previous year,” said Zinyanduko.

For the NRZ, which has struggled with mounting losses since the turn of the century, this is a significant milestone.

NRZ, established in 1980, forms part of the country’s transport infrastructure landscape and has been a pivotal provider of rail transport services across the country and beyond the borders.

Of late, the state-owned enterprise has been the subject of extensive turnaround discussions alongside sister parastatals such as the Air Zimbabwe and ZESA.

Deputy Minister of Transport and Infrastructural Development, Honourable Mike Madiro has tasked the parastatal with building on this financial coup and notching up quality indices and freight capacities to bring the transport institution to profitability.

Revamping the NRZ

“The government’s commitment towards revamping NRZ from the highest office is beyond doubt. The objectives are to improve the rail infrastructure quality index to 68% by 2025 from the current 57% and increase freight volumes to 6.7 million tonnes per annum from the current 2.3 million tonnes as well as increase passenger services,” said Madiro.

“The Government is eager to see the success of NRZ and hence our emphasis to make good the NRZ vision: To be the dominant logistic player in the region by 2030,” he added.

“The critical role of NRZ as an economic enabler will entail increasing capacity of freight from the current 2.5 to 6.5 million tomes by 2025 and improvement of the passenger train services,” noted the Deputy Minister of Transport and Infrastructural Development, Honourable Mike Madiro.

Need for Capital

For a company that has been in the doldrums, this is a do-or-die mission which might demand significant capital injection to see it through.

The company, which is presently struggling with an aging rail fleet, has to also overcome the challenges of declining revenue inflows that stem from maintenance costs that it incurs even as it fails to cover operational costs.

But the NRZ appears determined to get back up on its feet as it also looks to push its operations into the freight forwarding market in the regional space.

Lastly, as a player that has been around for over four decades, the NRZ has contributed significantly in the country’s economic growth especially during the country’s formative years, a role that the transport parastatal is eager to rekindle through its turnaround strategy.