EARNINGS WATCH- Sodic’s net profits fell 77% to EGP 40 mn in 2Q2020 from EGP 175 mn during the same period last year, it said in its earnings release (pdf). Revenues dropped 40% during the period to EGP 645 mn as 13% of gross sales were canceled. The latest quarterly figures mean the company’s net profits fell 80% during 1H2020 to EGP 68 mn, down from EGP 336 mn in the equivalent period last year. Revenues fell by almost 50% to EGP 1.07 bn during the six-month period. The number of units delivered fell from 441 in 1H2019 to 256 units this year, which the company attributes to covid-19 restrictions and the majority of deliveries being postponed to the second half of the year.

The company attributed the decline in profits during the second quarter to covid-19 lockdown measures and sales cancellations of EGP 130 mn, increasing cancellations for 1H2020 to EGP 320 mn. Sales seem to be reviving with the lifting of lockdown restrictions though, with gross sales for the year returning to 2019 levels after a rebound in July.

GB Auto posted net profits of EGP 115.8 mn in 2Q2020, rising from a net loss of EGP 8.9 mn during the same quarter last year, the company said in its earnings release (pdf). Revenues during the quarter dropped 29.3% y-o-y to EGP 4.03 bn. The company’s auto and auto-related (A&AR) segment’s revenues fell 38.6% y-o-y to EGP 2.89 bn as a result of the country’s lockdown measures. The company recorded net profits of EGP 254.2 mn in 1H2020 on revenues of EGP 9.91 bn.

Demand on passenger cars was hard-hit in April and May as the government’s lockdown measures, including a nationwide curfew and the shutdown of traffic departments, coincided with “the low seasonality associated with Ramadan and Eid,” CEO Raouf Ghabbour said. GB Auto’s commercial vehicle line of business also saw a slowdown during the quarter, as stagnant tourism and “corporate austerity measures saw limited fleet renewals.”

The company’s outlook is still upbeat, with a pickup in activity as of June setting expectations for a continued rebound throughout 3Q2020. The reopening of traffic departments “coupled with pent up demand” is already driving up foot traffic at GB Auto’s showrooms, while “a more streamlined regulatory environment” for two- and three-wheelers is also helping to put this line of business on an upwards trajectory.

Sarwa Capital’s net income dropped 42% y-o-y in 2Q2020 to EGP 36 mn, the company said in a press release (pdf). Net income after minority interest during the first six months of the year came in at EGP 127 mn, down 31% y-o-y from EGP 183 mn during the comparable period last year. The company is cautiously optimistic on signs of a recovery thanks to “the rebound in activity across many asset classes,” with management saying its businesses are well-positioned to capitalize on “shifts in the market.”