Zeda (ZZD) H1 2025 earnings summary

Executive summary

• Achieved double-digit earnings growth and solid returns despite a challenging macroeconomic and trade environment, supported by a robust and diversified operating model across leasing, rental, car sales, and subscription services.

• Maintained resilience and agility, with business fundamentals and disciplined strategy execution driving performance.

• Interim dividend of 55 cents per share declared, up 10% from the prior year, in line with dividend policy.

• Initiated a successful R850 million bond issuance under a new R5 billion DMTN programme, diversifying funding sources and reducing cost of debt.

• Notable investment in youth development, safety initiatives, and sustainability, including a 6% reduction in Scope 2 emissions.

Financial highlights

• Revenue reached R5,188 million, down 1.6% year-over-year; car sales revenue declined 5.8% due to lower fleet volume, while leasing revenue increased 5.6%.

• Operating profit margin improved to 16%; EBITDA margin remained strong at 34%, with EBITDA up 11%.

• Return on equity stood at 21.8%; basic and headline EPS both increased by over 11%.

• Net finance cost reduced by 90 basis points, aided by lower funding costs and interest rate cuts, though average debt levels increased.

• Effective tax rate decreased to 26.9% from 28.9%.

Outlook and guidance

• Focus remains on digital integration, cost efficiency, and deepening the usership economy, with priorities including technology upgrades, growth, cost efficiencies, and Ghana divestment.

• Optimism for further rate cuts to support affordability, but concerns persist over GDP growth, disposable income, and subdued trading conditions.

• Continued expansion in Africa and public sector expected to provide growth opportunities, with a healthy leasing pipeline.