Ghabbour Auto (GB), a leading car distribution company in the Middle East and North Africa, saw 707 million EGP (U.S. $120 million) in profits during the first quarter of 2011. The decrease in revenue from the same period last year is a result of the Egyptian revolution and its impact on commercial and industrial activities in Egypt and the region. Raouf Ghabbour, CEO and managing director of the company, assured that a genuine democratic transition would have a wide positive impact on all companies and commercial and industrial activities. He said the recent shift in the Egyptian marked did not affect the safety of the business model or the company's customer base. He also said sales of Tuk Tuks, small three-wheeled vehicles, rose sharply during the first quarter of this year. The quarter's profits are the second-largest Tuk Tuk sales for the company, and the highest compared to the same quarter in other years. The company has managed to maintain profit levels without reducing employees or cutting salaries thanks to its management measures and cutting spending in all sectors, he said. Main sectors like vehicles, frames, after-sales services and the activities of consumption finance have begun recovering since March, Ghabbour said. Meanwhile, motorcycles and Tuk Tuk sales have increasingly grown despite the economic slowdown. However, GB's management is expecting negative effects in some sectors, particularly sectors that serve low-income workers. On the other hand, the company's operations in Iraq are recording strong performance and do not face obstacles except in supply movement. GB's management believes the expansion in after-sales services in Iraqi market will increase the revenues. GB plans to continue cutting spending. During the first quarter of this year, the company reduced stock levels in all sectors while making sure there is adequate inventory to meet the possibility of supply disruption in the future. Ghabbour concluded that working in a genuine democratic regime would positively affect national economy in the long term. He added that Egypt will need to support and promote short-term solutions which will prepare the ground to put Egypt on the right path regionally and internationally.
