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GB Corp saw a decline in net income and revenues in 1Q 2023 as it continued to feel the impact of the slowdown in the automotive industry, the company said in its latest earnings release (pdf). Profits fell 53% y-o-y to EGP 107.7 mn while revenues were down almost 40% to EGP 4.7 bn in the January-March quarter on the back of what the company described as “challenging market conditions.”
Tough times in the auto sector: GB Corp’s automotive arm GB Auto saw revenues fall 37% y-o-y to record EGP 3.9 bn, “hindered by the devaluation of the EGP, restrictions on imports, and a slowdown in opening L/Cs, which limited inventory supply across the portfolio.” GB Auto posted a net loss after non-controlling interest of EGP 80.5 mn for the quarter, compared with net earnings of EGP 107.9 mn in the same quarter a year before. The company put the negative income down to an EGP 264 mn forex loss, “the majority of which is recoverable upon the sale of the inventory.”
REMEMBER- Sales across the auto sector remained depressed in the first three months of the year after falling more than a third in 2022. The sector is yet to recover from the impact of capital controls brought in last year that made it almost impossible for distributors to import cars and components, and forced a number of global car manufacturers to suspend sales to Egypt.
GB Corp’s NBFS arm fared better: The company’s non-banking financial services subsidiaryGB Capital reported a 21% increase in revenues to EGP 1.0 bn in 1Q 2023. Net income was up 55% y-o-y to EGP 189.4 mn.
What they said: “Consolidated revenue and net profit fell year-on-year as we grappled with supply shortages across all our GB Auto lines of business. However, by having a diversified revenue stream we demonstrated the ability to identify and capitalize on growth opportunities in Iraq, which currently represents 22.3% of our revenue,” CEO Nader Ghabbour said. “We are confident that once inventory levels rebound, strong demand for our portfolio will lead to a rapid turnaround in results. On the other hand, GB Capital's performance has been steadily growing and achieving operational milestones.”
