GB Auto Corporate Growth and Expansion Strategy
AUTO
Financial Position and Working Capital Management
Cost Considerations
Working Capital, Debt Position
Currency effects and supply shortages had significant
impact on 3Q performance
■ Devaluation of the EGP against the USD and YEN
resulted in a net EGP 20.9 million reduction in profits
▪ Supply shortages of CBU vehicles in Iraq (EGP 5.6
million in lost profits) and tuk-tuks in Egypt (EGP 16.3
million in lost profits)
■ The one-off tuk-tuk shortage has been addressed;
management continues to work with Hyundai to refine
the mix and quantity of product available in Iraq
■ SG&A costs rose in 3Q10, on the back of the one-time
cost of launching the new Mazda representation, increased
costs due to the new Mashro'ey and the Iraqi operations
■ Financial costs have increased because the company is
incurring costs of the bond while the funds are
underutilized at present
■ 3Q saw an increase in working capital due to rise in
business activity, leading to rise in debt
Overall inventory (the largest WC component) remains at
around 2 months for Passenger Cars and 6 months for
Commercial Vehicles
■ Net debt-to-equity fell to 0.49 at the end of 3Q10 from
0.58 at the end of 2010
■ The increase in Net debt-to-equity from 0.38 at the end of
December 2009 is as expected due to the investments in Iraq
and the after-sales expansion
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