C&I leasing plans to raise fresh capital in H2

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By Kayode Tokede

C & I Leasing, a fleet management business, plans to raise a corporate bond in second half (H2) 2020 to finance its operations and support its business sustainability.

The company explained that the capital raise is part of a strategy to cover its forward plans between 2020 and 2024 designed to improve, operations and cost efficiency.

According to the management of the company, the plan is to raise capital through a fixed income issue and will be working towards creating new businesses from the array of opportunities that can come out of the coronavirus pandemic.

The Company also wants to maintain a minimum capital adequacy ratio of 12.5per cent alongside cost optimization initiatives, complemented by supply chain improvements.

Financial highlights of C&I Leasing’s H2 2020 result showed that Gross earnings dropped by 5.9 per cent to N15.3billion from N16.3billion in H1 2019 while Total Assets gained about six per cent to N59.5billion from N57.5bn in financial year ended 2019.

The report further revealed the following, Gross earnings of N15.3 billion, down by -5.9per cent y-o-y (H1 2019: N16.3 billion) this is on the back of COVID-19 and the slide in oil price as most clients are requesting price reduction in services provided by the Company, especially the International Oil & Gas Companies and local logistics and outsourcing companies, rental income.

Net operating income of N3.8 billion, down by -18.5 per cent y-o-y (H1 2019: N4.6 billion) underscoring the growth in gross earnings across the various business units.

C & I Leasing profit after tax was down by 69.1 per cent to N268.0 million in H1 2020 from N866.9 million reported in H1 2019.

Basic earnings per share of N0.36 kobo in H1 2019 y-o-y (H1 2019: N2.14kobo) Marine business achieved 76per cent vessel utilization rate in H1 2019 (H1 2019: 92per cent)

Year-to-date (YTD) growth in total assets of +5.9 per cent to N59.5 billion as at H1 2020 as against N56.2 billion in FY 2019, was largely driven by growth in cash and balances with banks due to proceeds from rights issue. operating lease asset, other assets and cash & balances with the bank.

Total assets was largely driven by growth in cash and balances with banks due to proceeds from the company’s rights issue, operating lease asset, other assets and cash & balances with the bank.

Growth in total liabilities driven by increased issuance of commercial notes and other payables. Borrowings was limited H1 as a result of the pandemic in an attempt to understand the new order of business.

According to the Managing Director/CEO, Mr. Andrew Odibi, the focus of C&I Leasing will be to reduce operating expense growth below inflation rate in the country, and explore opportunities for growth to improve customer visibility.