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MarketScreener Homepage  >  Equities  >  Egyptian Exchange  >  GB Auto (S.A.E.)    AUTO   EGS673T1C012

GB AUTO (S.A.E.)

(AUTO)
  Report
End-of-day quote. End-of-day quote Egyptian Exchange - 10/26
2.77 EGP   0.00%
2018GB AUTO GROUP : Slide show half-year results
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2018GB AUTO GROUP : Half-year results
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2018GB AUTO GROUP : 1st quarter results
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SummaryMost relevantAll NewsPress ReleasesOfficial PublicationsSector news

GB Auto : reports 1Q17 Results

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05/11/2017 | 11:37am EDT

The performance of our After-Sales,

Financing Business, and ancillary trading business (such as Tires) are living proof of that. These busi- nesses will set us on a new path of growth.

GB Auto Reports 1Q17 Results

Automotive leader reports solid gross profit growth in 1Q17 as non- auto lines of business pick up steam

11 May 2017 - (Cairo, Egypt) GB Auto (AUTO.CA on the Egyptian Exchange), a leading automotive company in the Middle East and North Africa and non-bank financial services provider in Egypt, announced today its consolidated results for the first quarter of 2017. Group revenues were maintained y-o-y in 1Q17 despite the challenging operating envi- ronment and thanks to strong revenue growth across most of GB Auto's non-auto busi- ness lines.

The first quarter saw GB Auto's revenues gain 1.3% y-o-y to LE 2,963.2 million compared to LE 2,924.6 million in the same quarter last year. While gross profit saw an increase of 13.0% to LE 500.1 million, the company reported a net loss of LE 154.5 million compared to a net profit of LE 28.6 million last year. The loss is a result of foreign exchange losses of LE 104.5 million compared to LE 61.1 million last year and higher finance costs of LE

277.8 million (compared to LE 121.5 million in 1Q16).

Importantly, 1Q17 revenues and sales volumes reflect a partial recovery in sales in the month of March, following a slowdown in the first two months of the year due to the ripple effects of the float of the Egyptian pound on 3 November 2016 and the market still adjusting to higher vehicle prices. While the quarter's overall sales volumes were lower, the company believes it is now on the road to recovery and sees full recovery happen- ing gradually in the next 6-12 months.

"There's no denying that the market was paralyzed during January and February, but as the Egyptian pound found its footing, March gave us a sign that consumers might be will- ing to adjust to new price levels," said GB Auto Chief Executive Officer Raouf Ghabbour. "A targeted round of promotions during the month saw volumes pick up to c.50% of what they've been historically - a huge lift from figures coming out of January and Feb- ruary. Our diverse portfolio of countercyclical lines of business also helped support our performance for the quarter, a trend we anticipated as we work to transform GB Auto."

GB Auto's Egyptian Passenger Cars performance was largely in line with the rest of the market, with the Egyptian Passenger Car market in 1Q17 seeing a 41.0% drop in total sales volumes, falling from 33,381 in 1Q16 to 19,704 units this quarter. The division re- corded a 36.4% y-o-y drop in revenues to LE 885.3 million in 1Q17 as volumes fell 64.3% during the quarter to a total of 4,026 units sold with customers still feeling the impact of higher prices and our inventory levels being much higher than normal at our third- party dealers.

Revenues from the Motorcycles and Three-Wheelers division in Egypt fell 10.4% y-o-y in 1Q17 to LE 380.5 million. This came mainly on the back of lower sales volumes, which were 42.5% y-o-y below 1Q16 levels, as higher prices impacted target consumers, who are typically within a low-income bracket. However, demand markedly picked up during March, giving management signs that the division is set to make a faster recovery than Passenger Cars.

The Commercial Vehicles & Construction Equipment division posted a 9.7% y-o-y in- crease in revenues despite a 52.1% y-o-y contraction in sales volumes. Meanwhile, mar- gin expansion enabled gross profit to grow 56.4% y-o-y for the quarter. The results were largely driven by the Bus and Construction Equipment segments, with GB Auto maintain-

1

1Q17 Earnings Press Release

ing its leadership position in the city and intercity bus segments and reporting an uptick in demand from the tourism sector.

GB Auto's After-Sales division provided an important stream of high-margin revenues throughout the quarter as customers continued to choose GB Auto's network to maintain their vehicles. The division saw marked increases in both the top and bottom lines. Rev- enues stood at LE 239.1 million (compared to LE 160.5 million in 1Q16) and gross profit at LE 77.4 million (compared to LE 48.3 million in 1Q16) with the gross profit margin increasing 230 basis points to 32.4%.

Tires continued to be an important ancillary business, with revenues growing 10.8% y- o-y during the quarter. Management sees substantial growth potential going forward as the company pursues additional brand representations.

Regional activities began a welcome pickup during the quarter in Algeria and Iraq, with revenues and gross profits of both countries showing significant improvement compared to last year.

The Financing Businesses delivered yet another quarter of strong growth, with revenues for 1Q17 surging 71.6% y-o-y to LE 597.6 million and gross profit 83.8% y-o-y to LE 144.6 million.

Looking ahead, Ghabbour noted, "GB Auto has proven this quarter that we have a solid non-auto business that can support the group and continue to deliver superior growth and profitability that are largely non-cyclical. The performance of our After-Sales, Financ- ing Business, and ancillary trading business (such as Tires) are living proof of that. These businesses will set us on a new path of growth."

Highlights of GB Auto's 1Q17 results, along with management's analysis of the compa- ny's performance and complete financials are available for download on ir.ghabbourauto.com.

2

1Q17 Earnings Press Release

Financial Statements

Income Statement Three Months Ended (LE million) 1Q16 1Q17 % Change

Egypt Passenger Cars Revenues

1,391.1

885.3

-36.4%

Egypt Motorcycles & Three-Wheelers Revenues

424.5

380.5

-10.4%

Egypt Commercial Vehicles & Construction Equipment Revenues

247.7

271.7

9.7%

Egypt Tires Revenues

91.1

100.9

10.8%

Financing Businesses Revenues

348.3

597.6

71.6%

Egypt After-Sales Revenues

160.5

239.1

49.0%

Regional Revenues

223.4

417.8

87.0%

Others Revenues

37.9

70.2

85.1%

Total Sales Revenues

2,924.6

2,963.2

1.3%

Gross Profit

Egypt Passenger Cars Gross Profits

172.1

125.0

-27.4%

Egypt Motorcycles & Three-Wheelers Gross Profits

82.7

28.8

-65.2%

Egypt Commercial Vehicles& Construction Equipment Gross Profits

33.1

51.7

56.4%

Egypt Tires Gross Profits

20.8

18.6

-10.5%

Financing Businesses Gross Profits

78.7

144.6

83.8%

Egypt After-Sales Gross Profits

48.3

77.4

60.2%

Regional Gross Profits

0.3

39.8 -

Others Gross Profits

6.4

14.0 -

Total Gross Profit

442.4

500.1

13.0%

Gross Profit Margin

15.1%

16.9%

1.7

Selling and Marketing

-144.7

-204.5

41.4%

Administration Expenses

-72.6

-90.3

24.4%

Other Income (Expenses)

11.3

16.0

41.1%

Operating Profit

236.5

221.3

-6.4%

Operating Profit Margin (%)

8.1%

7.5%

-0.6

Net Provisions and Non-Operating

-11.4

-16.6

45.7%

EBIT

225.1

204.7

-9.1%

EBIT Margin (%)

7.7%

6.9%

-0.8

Foreign Exchange Gains (Losses)

-61.1

-104.5

70.9%

Net Finance Cost

-121.5

-277.8

-

Earnings Before Tax

42.5

-177.6

-

Income Taxes

-28.3

13.8 -

Net Profit Before Minority Interest

14.1

-163.7

-

Minority Interest

14.5

9.2

-36.3%

Net Income/Loss

28.6

-154.5

-

Net Profit Margin (%)

1.0%

-5.2%

-6.2

Head Office

Cairo-Alex Desert Road, Km 28 Industrial Zone

Abu Rawash, Giza, Egypt

Investor Relations Menatalla Sadek, CFA Chief Investment Officer

Andre Valavanis Financial Analyst

Sarah Maged Financial Analyst

Direct: +202 3910 0485

Tel: +202 3539 1201

Fax: +202 3539 0139

e-mail: ir@ghabbour.com ir.ghabbourauto.com

Shareholder Information

Reuters Code: AUTO.CA Bloomberg Code: AUTO.EY

Shares Outstanding: 1,094,009,733

About GB Auto S.A.E.

GB Auto S.A.E. (AUTO.CA on the Egyptian Exchange) is a leading automotive com- pany in the Middle East and North Africa and non-bank financial services provider in Egypt. Across seven primary lines of business - Passenger Cars, Motorcycles

& Three-Wheelers, Commercial Vehicles & Construction Equipment, Tires, Financ- ing, After Sales, and Regional operations - the company's main business activities include assembly, manufacturing, sales and distribution, financing and after-sales services. GB Auto's portfolio of brands includes Hyundai, Mazda, Geely Emgrand, Chery, Bajaj, Marcopolo, Iveco, Volvo Truck & Bus, Volvo Construction Equipment, Mitsubishi Fuso, YTO, Karry, SDLG, Aksa, Lassa, Yokohama, Goodyear, Westlake, Triangle, Grandstone, Diamond Back, Diamond Coin, Jumbo, Monroe and Gaz- promneft. GB Auto has operations in Egypt, Iraq, Algeria, and Jordan. The company is headquartered in Giza, Greater Cairo Area, Egypt.

www.ghabbourauto.com

Forward-Looking Statements

This document may contain certain "forward-looking statements" relating to the Company's business. These may be identified in part through the use of forward- looking terminology such as "will," "planned," "expectations" and "forecast" as well as similar explanations or qualifiers and by discussions of strategy, plans or inten- tions. These statements may include descriptions of investments planned or cur- rently under consideration or development by the Company and the anticipated impact of these investments. Any such statements reflect the current views of the Company with respect to future events and are subject to certain risks, uncertain- ties and assumptions. Many factors could cause the actual results, performance, decisions or achievements of the Company to be materially different from any fu- ture results that may be expressed or implied by such forward-looking statements.

GB - Ghabbour Auto SAE published this content on 11 May 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 11 May 2017 14:36:19 UTC.


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Financials
Sales 2020 21 377 M 1 366 M 1 366 M
Net income 2020 580 M 37,0 M 37,0 M
Net Debt 2020 12 664 M 809 M 809 M
P/E ratio 2020 5,93x
Yield 2020 3,61%
Capitalization 3 003 M 191 M 192 M
EV / Sales 2020 0,73x
EV / Sales 2021 0,65x
Nbr of Employees 10 100
Free-Float 40,6%
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Technical analysis trends GB AUTO (S.A.E.)
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TrendsBullishBullishNeutral
Income Statement Evolution
Consensus
Sell
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Mean consensus BUY
Number of Analysts 7
Average target price 3,72 EGP
Last Close Price 2,77 EGP
Spread / Highest target 90,6%
Spread / Average Target 34,2%
Spread / Lowest Target -11,9%
EPS Revisions
Managers
NameTitle
Raouf Kamal Hanna Ghabbour Chairman & Chief Executive Officer
Karim Gaddas Group Chief Operating Officer
Abbas Hasan Abbas El Sayed Chief Financial Officer & Executive Director
Wissam Hamed Al-Adany Chief Information Technology Officer
Mohammed Naguib Ibrahim Independent Director
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