The C & I Leasing Plc has announced its unaudited results for 30th, June 2019, half the year.
C & I Leasing Group of companies made up of three divisions: Fleet Management, Outsourcing and Marine divisions with two subsidiaries, Leasafric (Ghana) and EPIC International FZE (United Arab Emirates) with a balance sheet of over N57.2 billion.
The company has a total staff strength of over 5,590 people and operational offices in Lagos, Port Harcourt, Abuja, Enugu, Benin and Ghana. It takes pride in its track record of exceptional and qualitative service delivery.
At present, the C & I Leasing plc brand can be felt in major sectors of the Nigerian economy, providing specialised services especially in Marine, telecommunications, oil and gas, equipment rentals, manpower outsourcing and transportation.
The company has its share listed on the official list of the Nigerian Stock Exchange since 1997 and has been in operations since 1991.
CONSOLIDATED INCOME STATEMENT
Gross earnings of N16.3 billion, up 27.2% year-on-year (H1 2018: N12.8 billion), lease rental income of N11.5 billion, up by 30.9% year-on-year (H1 2018: N8.8 billion), personnel outsourcing income increased by 22.6% to N4.0 billion year-on-year (H1 2018: N3.2 billion), lease rental expense grew by 36.4% to N5.5 billion year-on-year (H1 2018: N4.0 billion).
Net operating income of N4.6 billion, up 24.7% year-on-year (H1 2018: N3.7 billion), profit before tax of N909.2 million, up 25.8% year-on-year (H1 2018: N723.0 million), profit after tax of N866.9 million, up 27.1% year-on-year (H1 2018: N682.2 million), basic earnings per share of N2.14 kobo, up 397.8% year-on-year (H1 2018: 42.2 kobo).
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Total assets of N57.2 billion, up 8.7% year-to-date (Dec 2018: N52.6 billion), operating lease assets of N30.2 billion, down by 1.5% year-to-date (Dec 2018: N30.7 billion), shareholders’ funds of N12.8 billion, an increase of 8.0% year-to-date (Dec 2018: N11.8 billion).
EBITDA margin of 33.0% (H1 2018: 35.2 %), net profit margin of 5.3% (H1 2018: 5.3%), EBITDA/Interest expense of 2.1x (H1 2018: 2.1x), return on equity of 6.8% (H1 2018: 7.0%), net interest-bearing liabilities/ EBITDA of 6.3x (H1 2018: 6.8x), net interest-bearing liabilities /Equity of 2.6x (Dec 2018: 2.7x), net interest-bearing liabilities /Total capitalisation of 0.6x (Dec 2018: 0.6x), total interest-bearing liabilities/total capitalisation of 0.6x (Dec 2018: 0.6x).
Commenting on the results, the MD/CEO of C & I Leasing Plc, Mr. Andrew Otike-Odibi said: “We recorded robust growth of 27.2% in earnings from N16.3 billion in H1 2018 to ₦12.8 billion in H1 2019 and of 25.8% in profit before tax (from N723.0 million in H1 2018 to N909.2 million in H1 2019). Despite stringent operating environment, we continued to create more business opportunities, which allowed us to deliver more value for all stakeholders. As at H1 2019, our Group capital adequacy ratio stood at 18.5%, well above the CBN minimum requirement of 12.5% The improvement in this ratio is a result of our constructive attempts to make the Group more stable to external fluctuations in the industry.”
“We remain focused on our key priorities for 2019, including validation of our business expansion, growth objectives of meeting and exceeding client’s expectation, increasing demand for our products and services and recapitalising the Company’s capital base”.
H1 2019 FINANCIAL REVIEW
Gross earnings for H1 2019 increased by 27.2% to ₦16.3 billion (H1 2018: ₦12.8 billion), driven by the growth of our lease rental income (which represents 70.6% of total gross earnings). The growth in lease rental income is attributed to the expansion of our lease rental portfolio, both in the marine and fleet management services respectively.
Lease rental income comprising Fleet Management earnings and Marine earnings was up 30.9% to N11.5 billion in H1 2019 (H1 2018: N8.8 billion). The growth in earnings from the lease rental business is the result of reduced vehicle downtime and new contracts signed during the period. Marine provided ‘operate and maintain services’ on vessels owned by third parties, while Fleet Management saw an increase in earnings from the open rental business.
Personnel Outsourcing earnings rose by 22.6% to N4.0 billion in H1 2019 (H1 2018: N3.2 billion) and represents 24% of total gross earnings. This was driven by increasing demand for professional services especially by the International Oil Companies, which resulted in higher volumes on existing contracts through the provision of expanded services such as enhanced logistics and trainings.
Tracking income was up by 16.6% to ₦115.8 million in H1 2019 (H1 2018: ₦99.3 million) due to increase in demand for tracking services reflected in increased customer uptake of our devices.
Net operating income increased by 24.7% to N4.6 billion in H1 2019 (H1 2018: N3.7 billion), underscoring the growth in gross earnings across the various business units.
Interest income, other operating income and share of gain from marine joint venture grew 3.4% to N704.6 million1 in H1 2019 (H1 2018: ₦681.5 million), largely driven by returns from our Marine business.
Interest expenses were up by 17.5% y-o-y to N2.5 billion in H1 2019 due to an increase in term loans to drive business expansion and to support the purchase of operating assets for the Fleet Management Business.
Direct operating expenses were up by 31.7% y-o-y to N9.1 billion in H1 2019, reflecting the increase in gross earnings of the Group.
Indirect operating expenses increased by 23.9% to N3.7 billion in H1 2019 (H1 2018: N3.0 billion).
Impairment charges were down by 53.4% due to more effective cash collection policies and better management of the company’s receivables; depreciation charge increased by 18.7% from N1.6 billion in H1 2018 to N1.9 billion in H1 2019 due to the increase in operating assets in H1 2019; personnel costs rose 49.5% from ₦508.3 million in H1 2018 to ₦760.0 million in H1 2019 as a result of an ongoing welfare packages and performance incentives; other administrative and general expenses grew by 26.6% from ₦794.7 million in H1 2018 to ₦1.0 billion in H1 2019], reflecting an increase in legal and professional fees, on business entered in by the company during the period as well as insurance expenses.
Interest income and other operating income comprises of interest income and share of profit from joint venture.
Profit before tax of N909.2 million, up by 25.8% year-on-year as against N723.0, resulted in annualised return on equity of 6.8% (H1 2018: 7.0%) and annualised return on assets of 1.6% (H1 2018: 1.4%).
Year to date increase in total assets of 8.7% to N57.2 billion as at H1 2019, mainly on the back of the growth in finance lease receivables, trade and other receivables and other assets.
KEY DEVELOPMENTS AFFECTING C & I LEASING BUSINESS
Marine: it achieves 92.0% utilisation of its vessels for H1 2019 as against 90.8% in Q1 2019. This was due to proactive measures to handle maintenance challenges through deployment of electronic plan maintenance system and efficient supply chain management.
Outsourcing: it has continued to add new clients while renewing existing client contracts. The company has increased demand in HR Business Process Outsourcing requests especially in financial institution.
Fleet Management: there is significant increase in fleet size by 10% due to increase in operating lease and car rental business. Larger percentage of this increase came from new contracts.
Leasafric Ghana has commenced the process to raise a 100 million Ghc domestic bond in tranches of 20 million Ghana Cedi each; regulatory approval is ongoing. In addition, there is also a plan to list the company on the Ghana Stock Exchange.
In April 2019 the Company entered into a Joint Venture arrangement with OCS Integrated Services Nigeria Limited, an Integrated Local Service Company, established to provide comprehensive operations & maintenance solutions for offshore Oil & Gas fields. It is a complete asset management which involves offshore asset maintenance and manpower
solution. The company plans to raise Equity via a Right Issue for the purpose of business expansion, loan, refinancing and working capital need.
BUSINESS DESCRIPTION C & I LEASING PLC
C &I Leasing Plc is managed along three business lines, which are explained as follows:
C & I Fleet Management, with its Hertz car rental franchise both adequately supported by its owned service centre and Citracks telematics solutions service – a one-stop brand where the company offers superior fleet management service to its clients. This business provides technology-based, end-to-end tracking and other logistics and fleet management solutions for vehicles and various marine vessels. The company’s Ghanaian subsidiary, Leasafric Ghana, is the largest provider of outsourcing and fleet management services in Ghana. During the year, Leasafric launched a brand called “SWITCH” to strengthen the Ghana market. It was launched to explore and exhaust all market opportunities in Ghana Leasing Industry.
C & I Outsourcing specialises in human resource outsourcing for blue chip organisations along with our SDS training centre which focuses on human capacity development for existing outsourcing clients and others.
In addition, the company launched a recruitment portal and job application site, “GETAJOBNG”, with focus on providing employable candidates of the right quality to its clients and other interested corporate bodies at short notice.
C & I Marine, a division of C & I Leasing Plc is a duly certified marine entity with licenses to operate in the maritime sub-sector of the Nigerian oil and gas Industry. It possesses 20 owned vessels and 7 chartered. This unit is structured to provide a wide range of both onshore and offshore services to take advantage of the opportunities in the Nigerian Local Content laws. These services include line and hose handling, berthing and escort services, mooring support, firefighting, pollution control, security and floating and self-elevating platforms. To minimise downtime due to major maintenance and drydocking work on its boats, it ensures that well-structured maintenance plans are put in place with adequate stocking of spare parts to forestall stock-out.
The company’s focus across all its businesses, is to leverage its superior service with cutting-edge technological solutions to manage risks associated with rapid growth, while diversifying its earnings streams and providing opportunities for client growth and retention.