Egypt’s GB Auto Profits Nearly Wiped Out By Political, Economic Crisis

Egypt’s biggest listed vehicle assembler and distributor GB Auto said on Tuesday its second quarter net income was nearly wiped out by the pound’s decline and warned about the impact on full year results of political and economic turmoil.

Egypt’s sole dealer of Hyundai and Mazda passenger cars said net income tumbled by nearly 73 percent to LE16.1 million ($2.3 million), while sales revenue shrank by 0.5 percent to LE2.17 billion compared with the second quarter of 2012.

The Egyptian pound has dropped more than 10 percent against the dollar since the beginning of the year.

“I believe we have absorbed 90 percent of the impact of devaluation to-date of the Egyptian pound on our business, and we have taken almost all of this blow in the second quarter,” chief executive Raouf Ghabbour said in a statement.

“Challenges in the second quarter lead us to be cautious in our outlook for the remainder of the year as we consider the potential for continued domestic political unrest and economic turmoil in Egypt,” he said.

Supporters and opponents of ousted President Mohamed Morsi battled in the streets of central Cairo on Tuesday, as Egypt remained dangerously split six weeks after the army overthrew him in response to mass unrest against his rule.

Source : Ahram