Zeda FY24 HEPS declined 18.1%

Zeda, a car rental, leasing, and sales group, has reported lower annual earnings despite achieving record revenue for the year ending in September. The company faced significant challenges in the used car market, which continued to put pressure on its sales figures. While revenue saw a substantial increase of 14.5%, the headline earnings per share declined by 18%. EBITDA showed a modest increase of 1%, but operating profit witnessed a decrease of 6%. The operating margin also took a hit, dropping from 17% to 14%. To delve deeper into these numbers and the overall performance of Zeda, CNBC Africa interviewed Ramasela Ganda, the CEO of the company. Ganda shared insights into the strategy implemented by Zeda to navigate the tough market conditions. He highlighted the focus on growing the heavy commercial and operating leases, diversifying the car sales business, and adapting to the changing landscape in the industry. Despite the challenges, Zeda managed to mitigate some of the impacts experienced by the broader market. The company's integrated mobility strategy played a crucial role in staying agile in the face of fierce competition and market shifts. One of the key points discussed in the interview was the transformation of the used car market and the notion of the end of super profits. Ganda addressed the new entrants in the market, particularly from China, who have been aggressive in their pricing strategies, posing challenges to traditional players. He emphasized the impact of economic conditions, such as high interest rates, on consumer behavior. However, he also expressed optimism about a potential turnaround in the market, citing a recent uptick in the residual values of certain vehicles. This shift indicated a possible stabilization in a market that had been under pressure for a prolonged period. Ganda further discussed Zeda's strategic approach to handle competitive elements and capitalize on opportunities in the evolving landscape. The CEO underscored the importance of total cost of ownership in decision-making processes, especially when it comes to partnering with OEMs and assessing risk-sharing models. By focusing on diversification and maintaining open communication with suppliers, Zeda aimed to optimize returns across its rental, leasing, and sales segments. The company's commitment to integrated mobility is key to its resilience and ability to adapt to market dynamics. Looking ahead, Zeda's primary focus remains on growing its leasing business, targeting both corporate and public sectors. The company is also eyeing expansion opportunities in Greater Africa, with plans to enter new markets and enhance its presence in the region. By closing operations in certain areas and exploring growth outside of South Africa, Zeda aims to position itself for sustainable growth and profitability in the future. In conclusion, Zeda's performance reflects the broader challenges facing the automotive industry, particularly in the used car market. Despite the decline in earnings, the company's strategic initiatives and focus on integrated mobility have enabled it to navigate turbulent waters and pave the way for future success.