Infrastructure Credit Guarantee Company Plc (InfraCredit), an NASD-listed firm that guarantees financial instruments used for infrastructure projects, reported a pre-tax profit of N61.5 billion for the full year ended December 2024.
This marks a 30.84% year-on-year increase, up from N47 billion in 2023, driven by strong top-line growth and exchange gains.
However, that momentum slowed in the first quarter of 2025, with profit dropping to N1.8 billion, compared to N33.3 billion in the same period of 2024, despite notable increases in key income lines.
- Gross revenue rose to N7.8 billion, up from N5.6 billion.
- Net guarantee fee income grew to N1.1 billion, from N706.6 million.
- Total operating income surged to N5.5 billion, compared to N3.8 billion in Q1 2024.
The significant profit decline was largely due to the absence of foreign exchange gains, which had contributed N31.8 billion to Q1 2024 earnings.
With that one-off gain missing, the bottom line was notably weaker, despite strong underlying performance.
Exchange loss in Q1 2025
In the first quarter of 2025, InfraCredit swung from a strong exchange gain of N31.8 billion in Q1 2024 to an exchange loss of N618.8 million, reflecting the impact of currency volatility.
InfraCredit provides local-currency guarantees that help improve the credit quality of debt and bond instruments used to finance key infrastructure projects, spanning renewable energy, transportation, housing, and more.
- By enhancing creditworthiness, the company lowers risk for institutional investors such as pension funds and insurance firms, encouraging greater participation in Nigeria’s infrastructure development.
However, the volatility of the naira during the quarter likely contributed to the reversal in exchange gains, weighing heavily on the bottom line despite solid top-line performance.
Naira volatility
According to a report from AIICO Capital Limited, the naira depreciated for most of the first quarter of 2025, despite the CBN injecting over $669 million in foreign exchange interventions during the period.
The CBN’s efforts were aimed at stabilizing the currency amid dwindling dollar inflows and rising offshore demand for foreign exchange.
Still, the naira weakened by 2.29% in March, closing at N1,532.37, compared to N1,498.07 at the beginning of the month, according to AIICO.
This depreciation likely impacted businesses like InfraCredit, which provides long-term, naira-denominated guarantees for infrastructure funds a model sensitive to currency fluctuations.
Nonetheless, InfraCredit’s balance sheet remains fundamentally strong.
- The company’s total assets rose to N313.2 billion, up from N309.2 billion.
- Retained earnings increased to N102.2 billion from N100.8 billion.
- Total equity grew N159.4 billion, up from N158.2 billion.
InfraCredit currently has a market capitalization of N74.8 billion.
