Egyptian car sales network GB Auto blamed labour unrest at South Korean producer Hyundai on Tuesday for a 26.5 percent year-on-year drop in third quarter net profits.
Egypt’s biggest listed automobile assembler said the failure of its main supplier to keep up with demand from consumers for its cars was the key factor in the fall in profits to 65.4 million Egyptian pounds ($10.7 million).
GB Auto controls nearly a third of a domestic passenger car market that has grown quickly in recent years, helped by easier access to credit, a wider range of cheaper Asian vehicles and a fast expanding population.
Third-quarter revenue also dropped 14.1 percent year-on-year to 2.05 billion pounds, the firm said.
“Our Egyptian passenger car business … saw a dip in sales in the quarter just ended on the back of supply constraints following an extended period of labour unrest at Hyundai Motors, our key global partner,” said Chief Executive Raouf Ghabbour.
Hyundai saw its first fall in monthly sales in more than three years in August, due to walkouts in a wage dispute that stopped it from making 82,088 cars, worth some $1.5 billion.
GB Auto said it had held extensive talks with Hyundai and believed it would increase shipments in the fourth quarter and in 2013, he said.
“We see outstanding demand in both Egypt and Iraq for Hyundai passenger cars,” Ghabbour said in a emailed statement. “We are selling everything we receive.”
Sales of motorcycles, three-wheelers, commercial vehicles and construction equipment had all increased, as had tyre sales, the company said.
GB Auto’s share price closed 3.3 percent higher on Tuesday, before results were announced.
Reuters
