Earnings watch: GB Auto, EFG Hermes release 4Q/FY2016 results
EARNINGS WATCH – GB Auto reported a net loss of EGP 865.7 mn in 2016, compared with a netprofit of EGP 233.1 mn in 2015, the company said in its earnings filing. The primarily non-cash loss came despite 24.6% y-o-y growth in revenues to EGP 15.3 bn as the company booked FX charges of some EGP 1.2 bn following the float of the EGP. GB Auto says it would have delivered a normalised net profit of EGP 345.9 mn in 2016, down from a comparable EGP 364.2 mn in 2015, if it were not for the FX losses charged directly to COGS and the increases in borrowing rates. “Nearly five months into a new economic reality in Egypt that sucked the oxygen out of the passenger car market, we are now seeing very clear signs that Egyptian consumers will remain enthusiastic buyers,” said GB Auto CEO Raouf Ghabbour.
EFG Hermes reported an almost eightfold increase in net profits in 2016 to reach EGP 1.6 bn, according to the company’s earnings filing, its best-ever profit performance. Revenues grew 279% during the year to EGP 4 bn. EFG Hermes also says it realized EGP 2.7 bn in foreign exchange gains in FY2016 following the EGP float. CEO Karim Awad says the company implemented “cost restructuring initiatives” in 4Q2016 and is investing in growth this year: “Three months into 2017, we continue to develop our merchant banking platform, have expanded our brokerage execution capabilities to include frontier Asian exchanges and are now in the final stages of opening our New York office.”