Unrest drives down Ghabbour car sales

Egypt's Ghabbour Auto, a car assembler and distributor, will see a dent in profits during the fourth quarter after the country's Automotive Marketing Information Council said car sales fell 36 per cent last month to 10,060 units. The company has forecast slower sales this year following the revolution that ousted Hosni Mubarak as president. Fourth-quarter revenue is forecast to be "slightly above" 2 billion Egyptian pounds and profit is likely to be "slightly lower" than that of the third quarter, said Raouf Ghabbour, the chairman and chief executive. Ghabbour's main business is in passenger cars. It is the sole agent and distributor of Hyundais in Egypt and runs an after-sales service network for cars and commercial vehicles. It is also the exclusive agent for Mitsubishi and Volvo buses and the sole agent for the tuk-tuk. Ghabbour's net profit is dependent on currency movement, and it carries exposure to multiple currencies: the dollar, the Korean won and the euro. The company was established in 1940 by the Ghabbour brothers and now has a market capitalisation of 2.62bn pounds. "The month of November saw the peak of political unrest, with wide demonstrations against the Supreme Council of the Armed Forces," said Mai Nehad, an analyst at HC Securities in Cairo. Investors should see "some volume volatility in the fourth quarter and first quarter next year in light of parliamentary elections and potential local instability", she said. Ghabbour will probably reach agreement with an unidentified car maker in the first quarter of next year. The company is also in talks to import and distribute light commercial vehicles, agricultural equipment, tyres and construction equipment, Mr Ghabbour said.