Bloomberg News

GB Auto to Name New Partner for Passenger Car Assembly in 1Q

November 15, 2011

(Updates with revenue forecast in fourth paragraph.)

Nov. 15 (Bloomberg) -- GB Auto, the Middle East’s biggest independent car assembler, will probably reach agreement with an unidentified auto manufacturer in the first quarter as its contract with Hyundai Motor Co. expires at the end of 2013.

The company is also in talks to import and distribute light commercial vehicles, agricultural equipment, tires and construction equipment from different manufacturers, Chairman and Chief Executive Officer Raouf Ghabbour said on a conference call today.

GB Auto, which ended talks with Tata Motors Ltd. for car assembly almost a year ago, is “finalizing” negotiations with a manufacturer in an emerging market in Asia, Ghabbour said. The Cairo-based company has assembled variations of the Hyundai Accent, a four-cylinder sedan, in Egypt since 1995.

Fourth-quarter revenue is forecast to be “slightly above” 2 billion pounds ($335 million) and profit is likely to be “slightly lower” than that of the third quarter, Ghabbour said. GB reported this week a 25 percent increase in third- quarter profit from a year-earlier to 89 million pounds.

Hyundai supply “constraints” to Egypt will reduce the company’s car sales in the Arab country, while its vehicle sales in Iraq are likely to remain at the same level as this year, he said.

GB Auto shares slipped 0.8 percent to 23.75 pounds in Cairo, bringing their decline this year to 45 percent and giving the company a market value of 3.06 billion pounds. Egypt’s benchmark EGX 30 Index has lost 42 percent this year.

--Editors: Tim Farrand, Peter Woodifield

To contact the reporter on this story: Ahmed A Namatalla in Cairo at anamatalla@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net


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