CAIRO: Egyptian vehicle maker GB Auto expects to double profits in 2010 and plans to start exporting buses and trailers to Middle Eastern and African markets from the second quarter, executives said on Monday.
The automotive sector in Egypt, the Arab world s most populous country, was hit last year by the downturn but demand has started to pick up, helped in part by a government plan to offer affordable taxis to drivers.
We will start exporting from the second quarter of this year, Raouf Ghabbour said in a conference call, referring to the firm s plans for the buses and trailers it makes.
He said initial markets targeted were in the Middle East, North Africa and the rest of Africa.
The firm s chief finance officer, Colin Sykes, said the firm expects to double its full year profit in 2010 on forecast revenue of between LE 5.7 billion and LE 6 billion.
GB Auto, Egypt s biggest listed automobile assembler, reported on Monday it made a net profit in 2009 of LE 201.4 million ($37 million) on revenue of LE 4.26 billion.
A recovery in the car market helped boost revenue in the fourth quarter by 48 percent to LE 1.32 billion, beating forecasts, with net income in the quarter amounting to LE 89.9 million.
In the last quarter specifically, we felt that the crisis was behind us, Ghabbour told the conference call.
We think that the total market (in Egypt) for this year is going to be in excess of 200,000 cars … which represents at least 25-30 percent growth compared to 2009, he said.
Iraq sales kick off
The company manufactures, assembles, imports and distributes vehicles for Hyundai, Bajaj, Mitsubishi, Volvo and Mazda Motor Corp.
It began in mid-February selling vehicles in Iraq, opening up a new market and said sales so far reached around LE 100 million.
We will see a contribution of almost LE 150-200 million in the first quarter of 2010. Ghabbour said of Iraq s sales.
He estimated total sales would reach about 36,000 vehicles within a year of operations in Iraq.
On Jan. 14 GB Auto said it had an exclusive agreement to import and sell Mazda-branded vehicles in Egypt.
It also approved in January the issue ol five-year bonds worth LE 1 billion to fund new service centers in Egypt and its regional expansion.