Egypt's GB Auto sees home market shrinking after strong Q4

Chief Executive Raouf Ghabbour blamesforecast slump on "truly volatile environment"
Ford workers assemble a Ford ST gasoline-powered vehicle at the Michigan Assembly Plant November 8, 2012 in Wayne, Michigan. The plant is the only one in the world that builds vehicles with five different fuel efficient powertrains on the same line. Ford held an event today at the plant that celebrated the launch of the C-MAX Energi plug-in hybrid. (Getty Images)
By Reuters
Wed 06 Mar 2013 02:11 PM

Egyptian vehicle assembler and distributor GB Auto said on Wednesday its net income grew 74.2 percent year-on-year in the fourth quarter, but forecast the local car market would shrink in the coming year.

Fourth-quarter net income rose to 75.90 million Egyptian pounds ($11.3 million), despite what Chief Executive Raouf Ghabbour said was a "truly volatile environment", while revenue was up 25.4 percent to 2.35 billion.

Earnings before interest and tax (EBIT) reached 205.2 million pounds, a 55.5 percent increase. GB Auto ended the year with 28.9 percent of the Egyptian passenger car market, down slightly from a year earlier.

Egypt is beset by a political and economic crisis, with foreign exchange in increasingly short supply.

"Egypt's foreign exchange environment and the expected deterioration of the macro (economic) climate in a high-inflation environment will see the Egyptian passenger car market shrinking in the coming year," Ghabbour said in a statement.

However, he added that new North African business should make an immediate positive contribution.

"We are confident that our strategy for this year will see us post bottom-line growth and improve our margins in Egypt, while seeing both Algeria and Libya making positive contributions to profitability from year one, essentially providing buffers to challenges in our home market."

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