July 1, 2025/Cordros Report
C & I Leasing Plc (CILEASING) published their Q1-25 unaudited financials yesterday (30 June), reporting a 43.5% decline in earnings per share to NGN0.15 (Q1-24: NGN0.26). The decline in earnings was largely due to a 40.8% y/y increase in finance costs, which weighed on profitability despite a 9.4% increase in gross earnings. Additionally, the dilutive impact of a bonus issue — which increased the company’s outstanding shares from 1.77 million to 2.95 million units — further pressured earnings per share.
CILEASING gross earnings increased by 9.4% y/y in Q1-25 to NGN9.60 billion, underpinned by growth across core income lines – lease income (+9.7% y/y | 89.0% of gross earnings), net outsourcing income (+16.6% y/y | 3.6% of gross earnings) and net tracking income (+86.6% y/y | 0.3% of gross earnings). In our view, this performance is reflective of improved service demand, particularly across the company’s marine and flee management segments, which continue to benefit from growing client needs.
Meanwhile, EBITDA (+922bps y/y) and EBIT (+506bps y/y) margins expanded to 54.0% and 32.2%, respectively, driven by strong topline growth which offset a steep 34.1% rise in operating expenses. We note that the rise in OPEX was driven by a 53.1% increase in administrative expenses (51.4% of total OPEX) and an 18.5% increase in personnel expenses (48.6% of total OPEX).
Elsewhere, finance costs grew by 40.8% y/y to NGN3.09 billion (Q1-24: NGN2.20 billion), driven primarily by a +228.3% y/y increase in finance lease interest to NGN1.98 billion. As a result, profit before tax (PBT) declined by 19.4% to NGN487.58 million in Q1-25 while profit after tax declined by 13.7% to NGN433.29 million despite a relatively lower effective tax rate of 11.2% (Q1-24: 17.1%).
Comment: We like that CILEASING’s was able to sustain topline growth and margin expansion in Q1-25, even as higher finance costs, owing to finance lease interest payments, weighed on profitability. Looking ahead, we expect the topline growth momentum to be sustained driven by increased demand, particularly in the marine services segment. However, elevated borrowing costs may continue to weigh on earnings. Our estimates are currently under review.
