Zeda Limited, a leading mobility solutions provider, has announced its interim results for the six months ended March 31, 2023, showcasing a robust financial performance. The company experienced significant growth in its Car Rental and Leasing businesses, resulting in increased revenue and improved profitability.
During the first half of 2023, Zeda’s Car Rental business demonstrated strong revenue growth of 26% compared to the previous year, driven by a diversified range of offerings, including subscriptions and aggressive expansion of the replacement (insurance) business. The recovery in inbound and corporate travel, as well as used car sales, further contributed to the business’s success. Revenue from inbound travel and corporate travel segments surged by 138.7% and 69.5%, respectively. The strategic focus on balancing discretionary and contracted services proved successful, with contracted services accounting for more than half of the revenue mix.
The Leasing business also performed well, with a 6% increase in revenue. This growth was attributed to an improved mix of heavy commercial vehicles, strong resale prices of used vehicles, and increased sales of value-added products and services. The company’s proactive approach to fleet management and engagement with customers yielded positive results. Despite challenges such as increased maintenance costs and longer lead times for new vehicle supply, the Leasing business remained stable and resilient.
Zeda’s Group EBITDA increased by 19% to R1,671 million, while the EBITDA margin was maintained at 38%. Operating profit grew by 25% to R803 million, with the operating profit margin remaining steady at 18%. The company’s efforts to optimize its balance sheet were evident in the repayment of R721 million to Barloworld since the unbundling and separate listing of Zeda. The goal is to settle the liability by the end of the calendar year.
Shareholders benefited from Zeda’s improved return on equity (ROE) of 28.3% (compared to 22.4% in FY2022) and a 27% growth in basic earnings per share (BEPS). The company’s strategic pillars focused on fixing, optimizing, and growing operations have proven effective in generating value for shareholders.
Looking ahead, Zeda remains committed to deepening the adoption of the usership economy and delivering integrated mobility solutions. The company plans to address underperforming operations and product lines through various initiatives over the next 18 to 24 months. Zeda also aims to retain its strong B-BBEE (Broad-Based Black Economic Empowerment) credentials and optimize its balance sheet while focusing on sustainability and environmental, social, and governance (ESG) strategies.
Despite headwinds in the Car Rental business, such as rising interest rates, inflation, and fuel price hikes, Zeda is optimistic about future growth opportunities. The Leasing business is expected to continue its upward trajectory, supported by a healthy order book and a proactive approach to fleet management. The company will expand its subscription offerings and explore alternative product offerings to cater to consumers under financial pressure.
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