Leading automotive company Ghabbour Auto (GB Auto) plans to spend around EGP 260m in capital expenditures (capex) during 2021.
The company’s management expects Egypt’s total market of passenger cars to grow by 10% year-on-year (y-o-y) in 2021. GB Auto will focus on increasing its market share, and expects to account for at least 20% of the market in 2021, amounting to 36,000 units, more than the 30,000 units sold in 2020.
Concerning the company’s capital outlook for 2021, GB Auto expects at least 25% growth in its portfolio, maintaining a healthy loan quality.
GB Auto is considering selling its minority stakes in non-bank financial institution (NBFI) companies to strategic investors that can add value.
GB Capital, the NBFI arm of GB Auto, has surpassed the fourth quarter (Q4) of 2020 forecast of EGP 230m in net profit after tax and minorities by at least 10%. During Q4 of 2020, some provisions are going to be reversed for GB Capital.
The company’s management believes that it could benefit from cross-selling products from GB Capital to the New City Housing and Development.
GB Auto is expecting to launch its “Echo” project by New City Housing and Development in March. The total cost of the project’s construction stands at EGP 2.1bn, and will have 160 buildings of 24 units each.
The average price per unit is expected to be between EGP 850,000-EGP 1m. The total area of the project stands at 620 feddan in the 6th of October city, of which the undeveloped portion will span 120 feddans.
GB Auto’s sales of passenger cars in Iraq during 2020 were negatively impacted by the novel coronavirus (COVID-19) pandemic, as well as low petroleum prices. The company is optimistic that 2021 will be better, particularly as its Hyundai inventory in Iraq has almost sold out, and only 450 units remain. GB Auto expects to sell 5,000 MG units in 2021.