CAIRO: While posting a 78.9 percent growth in revenues for the first half of 2010, Ghabbour Auto's results were found to be “lower than expected,” according to an investment firm. Ghabbour Auto, Egypt's sole distributor of both Hyundai and Mazda, saw revenues reach LE 3.1 billion for the reporting period, but received a downscaled valuation from Cairo-based investment bank Beltone Financial. Beltone financial revised down its valuation of the company after its research indicated that the firm's performance in three major categories — passenger car sales, commercial vehicle sales as well as the company's margins — were “lower than expected,” the firm stated in a note. Globally, Beltone's new numbers for the company stand at -6.9 percent for revenues and 17 percent for net profits. Ghabbour Auto only commented about its joint venture in Iraq, GK Auto, as to whether expectations were met, and not its operations in Egypt. Mariam Kamel, head of investor relations at Ghabbour Auto, said that its Iraq division “has performed in-line with expectations, growing from 1,341 units sold in March 2010 to a monthly run rate of 2,500 units by June 2010.” In Iraq, “the total unit sales for [the first half of] 2010 was 7,123 units yielding sales of LE531.0 million.” Regarding the Egyptian market, the passenger car market grew by 38.6 percent in the first half of the year, while the company's Hyundai sales grew by 65.3 percent, helping augment its market share to 28 percent. The company noted that revenues from its Hyundai Egypt operations netted LE 1.697 million. Concerning its commercial vehicle line, the firm recorded revenues of LE 341.5 million for the first half of 2010, which represents a growth of 22.1 percent over last year. Growth in this segment of the business, the company concluded, was rather muted due to the overall slump in the global economy. Any difference in the firm's performance between the Egyptian and Iraqi operations is due uniquely to infancy of its operations in Iraq, standing at around six months, versus 15 years in Egypt, Kamel highlighted. Looking ahead, Beltone portends a strong second half of 2010, with revenues at LE 4.1 billion and net profits at LE 208.5 million. Beltone financial noted that it believes the firm will be able to attain a market share of 27 percent by the end of the year, as numbers from its Iraqi segment of the firm have posted “very impressive” numbers so far. Indeed, the investment firm is confident that estimated 23,000 cars that it estimated to be sold in Iraq by the end of the year is “within reach.” As well, Beltone stated, “performance in other segments [of the firm] was assuring.” The investment firm further underscored that it views Ghabbour Auto as “one of the most exciting stories in the Egyptian market.” Moreover, Beltone concluded that the company's new ventures, in particular segments of its business that focus on organic growth, would likely act as a positive catalyst for the stock valuation of the firm. Beltone mentioned the possibility of a “new pipeline deal” for the firm, which it says will likely trigger a positive value of the company's stock. Kamel confirmed that her firm is “exploring” an opportunity with a “number of global automotive manufacturers for a number of ventures.” She indicated that some of the ventures could include “introducing a new entry-level car in Egypt and completing GB Auto's product range in the commercial vehicle line of the business.” Furthermore, she confirmed that the firm intends to launch “between two to three new deals” during the second half of 2010, going into 2011. Kamel would not comment further on the details of the new ventures, including the names of the potential partners involved.
