NIDF declares N4.40 distribution despite 9.8% decline in H1 profit

By Our Reporter

The Nigeria Infrastructure Debt Fund (NIDF), managed by Chapel Hill Denham, has declared a N4.40 per-unit cash distribution for the second quarter of 2026, despite reporting a 9.81 per cent year-on-year decline in profit for the first half of the year.

According to the Fund’s unaudited H1 2026 financial results, pre-tax profit fell to N10.63 billion, compared with N11.79 billion recorded during the corresponding period of 2025, reflecting weaker earnings from infrastructure loans and adverse fair value adjustments.

The Fund said unitholders registered as of 17 July 2026 will qualify for the distribution, which was declared on 6 July and is scheduled for payment on 27 July 2026. The payout will be fully funded from cash inflows generated during the second quarter.

Despite the earnings decline, NIDF noted that it continued to outperform its benchmark, the 10-Year Federal Government of Nigeria bond, even as benchmark yields declined by 336 basis points in 2026 compared with the previous year. Infrastructure loans within the portfolio are typically priced between 300 and 500 basis points above the benchmark on a floating-rate basis.

Total income declined by 8.08 per cent to N11.80 billion, from N12.84 billion in H1 2025, largely due to weaker returns from infrastructure lending.

Interest income from infrastructure loans, the Fund’s largest revenue source, dropped 23.16 per cent to N8.41 billion, down from N10.94 billion a year earlier. The segment accounted for approximately 71.3 per cent of total income during the period.

However, stronger returns on cash holdings helped soften the impact. Interest income from bank deposits surged 154.5 per cent to N3.28 billion, compared with N1.29 billion in the corresponding period of last year, contributing nearly 28 per cent of total income.

The Fund also recorded a N66.10 million fair value loss on infrastructure loans, compared with a N379.72 million fair value gain in H1 2025, further weighing on overall profitability.

Operating expenses rose 11.4 per cent to N1.17 billion, resulting in a corresponding 9.81 per cent decline in both profit before tax and profit after tax.

Despite weaker earnings, the Fund maintained a relatively stable balance sheet. Total assets stood at N137.32 billion, marginally lower than N137.67 billion at the end of the 2025 financial year, while cash and cash equivalents increased 13.9 per cent to N45.77 billion.

Net assets attributable to unitholders edged slightly higher to N130.56 billion, while the net asset value (NAV) per unit eased marginally to N109.08 from N109.12 at year-end 2025.

Financial assets measured at fair value through profit or loss declined to N91.12 billion, compared with N97.25 billion at the close of 2025.

NIDF disclosed that it has N6.2 billion in outstanding investment commitments and an additional N25.7 billion worth of infrastructure investments currently at the conditions-precedent stage, with disbursements expected to commence in July.

The Fund’s portfolio comprised 15 infrastructure investments as of the first half of 2026, with a weighted average annualised yield of 18.23 per cent, an average tenor at disbursement of 10.33 years, and a weighted average remaining life of 7.74 years.

On the Nigerian Exchange Limited, NIDF units last traded at N135.00, representing a 17.4 per cent year-to-date gain from the opening price of N115.00, while remaining unchanged on a month-to-date basis.

The latest results suggest that while lower infrastructure lending income moderated earnings growth, the Fund continues to preserve cash generation, sustain investor distributions and maintain a pipeline of long-term infrastructure investments.