CAIRO: Egypt’s GB Auto said on Thursday it expected its car sales to bounce back quickly after the political protests that ousted president Hosni Mubarak, but commercial sales would likely suffer for the rest of 2011.
The company, Egypt’s biggest listed automobile assembler, said net profit fell 55.4 percent in the fourth quarter of 2010, before the political unrest that began in January, while for the whole of 2010 it rose 28.1 percent.
The company weathered the first week of the political turmoil without incident, its distribution and service networks and its inventory were intact and it hadn’t had any labor action from its workforce, chief executive Raouf Ghabbour said.
"I am confident in forecasting that any negative impact on our segment of the automotive market will be short-lived, with a significant pick-up in sales during summertime at the onset of the market’s historical high season," he said in a statement.
Ghabbour expected demand for passenger cars to bounce back quickly, but demand for commercial vehicles, which accounted for 9.7 percent of revenue in 2010, would take longer.
"Pressure on the tourism industry and a general economic downturn … will make it unlikely corporates will opt to significantly expand or renew their fleets this year," he said in the press statement.
The company said it had a 37.3 percent share of Egypt’s market for buses in 2010.
GB Auto had a healthy balance sheet that would give it financial power at a time when banks are expected to be cautious in lending to corporations, Ghabbour said.
Still, the company would reduce its planned capital expenditure in 2011 by LE 130 million ($22 million) and take other measures to contain the short-term economic impact of the political turmoil.
GB Auto said net income for the fourth quarter fell to LE 40.1 million from LE 89.9 million in the fourth quarter of 2009, while revenue rose 33.7 percent to LE 1.8 billion.
This was "largely due to foreign currency pressures and some exceptional discounts on end-of-range promotions," it said.
For the full year, net profit rose 28.1 percent to LE 257.9 million.