Zeda (ZZD) H2 2024 earnings summary

Executive summary

• Achieved record revenue of ZAR 10.5 billion, up 14–14.5% year-over-year, with strong cash generation and balance sheet growth despite operating with a fleet 26% smaller than in 2019.

• EBITDA reached ZAR 3.3 billion, 1% higher than prior year, with EBITDA margin at 32%.

• Delivered solid shareholder returns: ROIC at 14.3%, ROE at 23.1%, both above WACC of 11.8%.

• Total shareholder return just under 25%, with a final dividend of ZAR 1 per share and annual dividend yield of about 7%.

• Maintained robust customer satisfaction (94%) and advanced ESG initiatives, including a 19% reduction in municipal water use and zero fatalities.

Financial highlights

• Leasing revenue up 12.7% to ZAR 2.8 billion; rental revenue up 15.2% to ZAR 7.7 billion.

• Car sales revenue increased 25.7%, with volumes up 17.3% and 3,000 more units sold year-over-year.

• EBITDA at ZAR 3.3 billion with a 32% margin; operating profit at ZAR 1.5 billion, impacted by unrealized forex losses and conservative asset valuation.

• Basic EPS down 17.3% to 320c; headline EPS down 18.1% to 312c year-over-year.

• Net debt to EBITDA at 1.4x; cash and equivalents at ZAR 1.2 billion; equity improved to 38% of capital structure.

Outlook and guidance

• Focus on business expansion, digital transformation, technology investment, and Greater Africa growth.

• Board approved disinvestment from Ghana leasing business.

• Growth pillars include car sales (with new Digital Dealership), leasing (corporate, heavy commercial, public sector), and subscription offerings.

• Dividend payout ratio revised to 30–50% to balance growth and shareholder returns; considering special dividends and share buybacks.

• Positive tailwinds include declining interest rates, stabilization of the used car market, and improved disposable income.