While 2019 was a tough year for Tunisian listed leasing companies, 2020 is not expected to be any better.           

In a November 2020 study, Tunisie Valeurs estimates that the coronavirus pandemic will strain the profitability of companies. “For 2020, we are seeing a segment net profit (excluding exceptional items) in a deficit of -1.2 million Tunisian dinars," the report reads.

According to Tunisie Valeurs, the hardening of the operating environment and the freeze of economic activity during the year will increase pressure on the cash flow of leasing companies, deteriorate the quality of the sector's portfolio and generate a surge in the cost of risk. The asset manager recommends that the affected companies explore opportunities to diversify their activities to better cope with the crisis.

Last year, leasing companies did not reach profitability. "The companies have had to deal with a hostile environment marked by a low investment, a drying-up of liquidity and a collapse of margins," Tunisie Valeurs said, adding that “the sector's profit mass has dropped by 41% to 25 million dinars compared to 2018 and financial profitability has shrunk by two rate points to 7.6% in 2019.”

Only International Leasing Company was able to achieve a 9% growth in its net income. All of the other 6 companies listed on the local stock market saw their profits shrink or their deficit increase.

Chamberline MOKO