July 31, 2025/Cordros Report

C & I Leasing Plc (CILEASING) released its unaudited Q2-25 results yesterday (30 July), reporting a 33.8% y/y increase in profit after tax (PAT) to NGN648.78 million, driven by robust topline growth and significant margin expansion. However, EPS declined by 18.5% y/y to NGN0.22, reflecting the dilutive impact of a bonus issue, which increased outstanding shares to 2.95 billion units (vs. 1.77 billion in Q2-24). For H1-25, EPS fell by 35.7% y/y to NGN0.36.

Gross earnings rose by 15.4% y/y in Q2-25 (H1-25: +12.5% y/y), supported by strong growth across core income segments — lease income (+13.2% y/y; 86.3% of gross earnings), net outsourcing income (+41.8% y/y), and net tracking income (+52.7% y/y). We attribute the increase in lease income, the primary revenue driver, to robust demand in the marine services segment — reflecting improved asset utilisation and better pricing — alongside rising demand for fleet management solutions amid elevated vehicle costs and logistics needs.
 
Across operating regions, gross earnings declined in Nigeria (-10.6% y/y; H1-25: -7.8% y/y), but expanded in Ghana (+102.1% y/y; H1-25: +72.4%) and the United Arab Emirates (+9.6% y/y; H1-25: +16.8%), underscoring growing traction in international operations.
 
Meanwhile, operating leverage improved markedly, with EBITDA and EBIT margins expanding by 21.56 ppts and 15.81 ppts y/y to 61.9% and 39.1%, respectively (H1-25: +2,971ppts and +1,890ppts to 58.2% and 35.9%). This reflected both topline growth and cost discipline, particularly as lease expenses declined by 30.9% y/y, owing to reductions in direct operating lease costs (-31.6% y/y) and lease asset maintenance (-71.8% y/y), amid a modest 7.3% y/y increase in OPEX.
 
Elsewhere, finance costs increased by 66.8% y/y in Q2-25 (H1-25: +54.2% y/y), largely due to a 140.0% y/y surge in finance lease interest and an 85.3% y/y rise in interest on commercial notes.
 
Finally, PBT rose by 29.0% y/y to NGN715.51 million, while PAT grew by 33.8% y/y to NGN648.78 million, supported by a lower effective tax rate of 9.3% (Q2-24: 12.6%).
 
Comment: CILEASING delivered a solid performance in Q2-25, with broad-based topline growth and improved contributions from international markets, notably Ghana and the UAE. Margin expansion was impressive, reflecting ongoing efficiency gains and a more favourable cost environment. While the earnings outlook remains constructive, particularly given momentum in gross earnings and margin resilience, elevated finance costs may weigh on the pace of bottom-line growth in subsequent quarters. Our estimates are currently under review.