C&I Leasing targets $100m fresh capital
To consolidate performance, C&I Leasing Plc has concluded plans to raise additional $100 million to expand its fleet operations.
The Group’s Chief Finance Officer (CFO), Alex Mbakogu, while addressing investors at the company’s investors’ forum in Lagos, on Thursday, said the Group will be raising more capital from its already multiple contracts with the International Oil Companies (IOCs) on its offshore support vessels and related marine services.
According to him, the company plans to raise the money at a time when its businesses are on the trajectory of growth.
He added that discussions are on with oil majors on extending its vessels contracts with them for more years to come.
“Lots of discussions are on-going with the IOCs on extending offshore support vessels and related marine services. You know, marine business contract is highly capital intensive and highly risk in nature. Even one vessel contract can cost between $20million and $25 million.
“So, we have about six discussions of vessels contracts on-going with the oil majors now and if we can have two or three of these contracts clicked, we will realise between $50 million and $100 million in the next two or three years. This will surely boost our expansion business plan,” he said.
Mbakogu noted that while exploring cheaper sources of funds, the company also plans redemption of $12.4 loan stock from Abraaj.
He added the company will also focus on developing human capital to strengthen service delivery and improve on implemented cost optimisation initiatives.
Mbakogu noted that the group experienced continuous growth in pre-tax profit margin between 2013 and 201, adding that it moved from a pre-tax profit margin of 2.48 per cent to a pre-tax profit margin of 6.09 per cent in 2016.
The Group Managing Director of the firm, Andrew Otike-Odibi, said the company currently manages over 4,437 professionals that are spread across several industries, including, oil & gas, telecommunications, banking, manufacturing, agriculture and FMCG among others.
“Our training and manpower development is structured under our SDS training centre. Leasafric is a subsidiary of C&I Leasing Plc in Ghana. It currently has a fleet size of 100 vehicles with a wide network of clients that cut across the oil and gas industry, power sector, telecommunication, FMCG and mining industries.
“It is the largest leasing company in Ghana and provides professional lease options for individuals and corporate bodies,” he said
Otike-Odibi noted that the group recorded a leap in profit but there is a huge capital requirement, which made it to retain some funds and currently looking at paying interim dividend in 2017 to compensate its shareholders.
Speaking on the redemption of $12.4 loan stock from Abraaj, the GMD said the company got approval from shareholders for the conversion of its loan to equity. He added that due to the volatility in foreign exchange, the company is planning to do a combination of redemption conversion to make the balance sheet healthier.
C&I Leasing posted 519 per cent growth in profit after tax for the financial year ended December 31, 2016.
According to a report released to the Nigerian Stock Exchange (NSE) the group recorded profit after tax of N920.9 million, up 519.0 per cent year-on-year from N148.8 million reported a year earlier.
The group also reported profit before tax of N1.0 billion, an increase of 122.5 per cent from N465.6 million achieved in 2015.
Revenue rose by 16.7 per cent to N17.0 billion from N14.6 billion reported in 2015 while lease rental income of N9.1 billion, up 11.4 per cent year-on-year from N8.2 billion.