Egypt's Ghabbour Auto says open to new acquisitions
CAIRO, Nov 17 (Reuters) - Ghabbour Auto (AUTO.CA), Egypt's largest publicly traded car assembly and retail company, said on Monday it was open to new acquisitions as its own growth slows, and could finance them through earnings and debt.
Ghabbour, whose net profit surged 88 percent in the third quarter, said it was on the lookout for local and regional opportunities that may present themselves in the context of an economic slowdown.
"GB Auto remains open to appropriate acquisitions that would fundamentally strengthen our position in the market while being careful to avoid unnecessary spending in the months ahead," CEO Raouf Ghabbour told a conference call.
"We have nothing on the table yet... Definitely, an acquisition has to be fundamentally strengthening our market position by deepening our line-up in a segment in which there is clear underserved demand," he added.
Ghabbour posted its second highest quarterly profit on record last week at 180 million Egyptian pounds ($32.6 million) for the quarter on strong vehicle sales, although it said growth could slow as the Egyptian economy cools.
But Ghabbour said he was expecting slower growth in the current period and had already begun reducing inventory levels in anticipation of volatile market conditions in 2009.
"While we do not typically provide earnings or sales guidance, I think it is important to note that GB Auto's fourth quarter results are likely to show growth in the low- to mid-single digits," he said.
A strong order book for commercial vehicles and a longer sales cycle, however, would "stand us in good stead heading into the new year," Ghabbour said.
Ghabbour has an exclusive licence from South Korea's Hyundai Motor Company (005380.KS) to assemble and distribute Hyundai cars in Egypt.
Ghabbour's shares ended 16.2 percent lower on Monday at 17.80 pounds as Egypt's benchmark CASE 30 index .CASE30 plunged 4.6 percent. ($1 = 5.5254 Egyptian pounds) (Writing by Cynthia Johnston)
