CAIRO: Egypt's GB Auto's quarterly earnings beat analyst forecasts as passenger car sales in Iraq helped offset lower sales in its home market, hit by the political turmoil that brought much of the economy to a halt. The firm, Egypt's biggest listed automobile assembler, said first-quarter net income plunged 88.8 percent year-on-year to LE 7.7 million ($1.3 million). But the results beat forecasts from all three analysts polled by Reuters. Anti-government protests that erupted on Jan. 25 brought much of the economy to its knees for nearly three weeks until president Hosni Mubarak, Egypt's ruler for 30 years, resigned on Feb. 11. Some of the country's main sources of foreign exchange, including tourism and foreign investment, have collapsed. "These momentous changes have had a significant short-term impact on our economy. Even a minor political change can prove disruptive, and this shift is hardly minor," GB Auto Chief Executive Raouf Ghabbour said. Despite the economic challenges in Egypt, GB Auto will see a "reasonably" profitable year in 2011 "as the country makes the transition from dictatorship to democracy," he said. Ghabbour cited a steady recovery in sales beginning in March across key segments, including passenger cars. He expects passenger car sales in Egypt to recover by the third quarter with the onset of the high summer season. "We anticipate a notable shift in consumer appetite toward smaller, less expensive vehicles," he said, adding that 2010 "could be a banner year ... as the economy returns to significant levels of growth and foreign investment returns to the country." The three analysts polled by Reuters forecast, on average, that GB Auto's first-quarter net income would total 6.56 million pounds. Estimates ranged between LE 6 million and LE 7 million. Revenue fell 2.1 percent year-on-year to LE 1.3 billion. Passenger car sales revenue fell 3.5 percent to LE 919.7 million. Sales in Iraq generated more than half of passenger car sales. GB Auto began operations in Iraq in February 2010. Passenger car sales in Iraq represented 37 percent of total revenue in the first quarter, while sales in Egypt came in at 34 percent. Motorcycle and three-wheeler sales were least affected by the political turmoil, with revenue jumping 59 percent to LE 193.9 million.
