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Haram Tourism Transport
(HTT,
also known as Haram Limousine) is GB
Auto’s most recent financing businesses
company under GB Capital. It operates
as a car rental / quasi-operational lease
company, is the premier vehicle fleet leas-
ing company in Egypt and serves top-tier
multinationals, financial institutions and
private sector companies, with an average
tenor of 3 years. HTT supports its clients by
enabling them to focus on their core com-
petencies and strengths while directing
scarce funding resources to mainstream
operations and leaving vehicle sourcing
and management to HTT. The company’s
service agreements entail acquisition, reg-
istration, insurance and maintenance of
thevehicle,with insurance inplace tocover
third-party damage and passengers within
the vehicle. Other complementary services
include fleet management reports.
2014 Business Review
• GB Auto’s Financing Businesses are
increasingly contributing a higher
share to the company’s overall profit-
ability, contributing significantly to
total GB Auto profitability in FY14.
• The Financing Businesses under GB
Capital are growing steadily, with
revenues up 49.0% year-on-year in
FY14 to LE 722.7 million and gross
profit up 35.9% y-o-y to LE 168.8 mil-
lion. At 23.4%, gross profit margin
in FY14 remains robust compared
to market norms and is reflective of
the status of this line of business as a
well-diversified, non-bank financial
service provider. Management notes
that as Mashroey, Drive and Haram
TourismTransport transact with the
Passenger Cars and the Motorcycles
& Three Wheelers lines of business,
there are invariably intercompany
sales between these units. The re-
sults mentioned above are after
elimination of these intercompany
sales. Before elimination, revenues
stood at LE 1.11 billion, a 50.2%
increase y-o-y. Performance would
have been higher if it were not dis-
rupted by the ban on the import of
motorcycles and three-wheelers into
Egypt, which impacted the perfor-
mance of Mashroey for the majority
of the first half of the year.
• At year-end 2014, total receivables
for the financing businesses stood at
approximately EGP 1.6 billion, with
excellent portfolio quality.
• The Financing Business model is
built on companies’ ability to ob-
tain leverage to fuel their lending
portfolios, which differs from the
trading or manufacturing business
model in terms of the amount of
debt incurred and the tenor of such
debt. All companies under GB Capi-
tal remain strongly under-leveraged
compared to industry norms and
regulatory caps which, in light of
the nature of the business (and par-
ticularly for GB Lease and Drive),
allows the companies to borrow up
to 8x shareholders’ equity..
• GB Lease reported strong perfor-
mance in FY14.The company grew its
top line 72.4% y-o-y and maintained
a strong foothold in the market, with
excellent portfolio quality.
• Mashroey continued to exhibit solid
profitability backed by strong pricing
power despite the downturn caused
by the ban on the import of motor-
cycles and three-wheelers into Egypt.
The company’s portfolio quality,
meanwhile, is very sound.
• Drive reported impressive 121% y-o-y
growth in its top line (before elimina-
tion of intercompany sales), with a
very healthy asset portfolio quality.
• Haram Tourism Transport also re-
corded a remarkable 115.7% rise in
revenues y-on-y in FY14. As it only
transacts with top-tier clients, the
company has a clean portfolio, with
assets under management exceed-
ing EGP 100 million.
Financing Businesses
Revenues by Year
(LE million)
2010 2011 2012 2013
2014
250.4
157.0
56.4
485.1
722.7
Ghabbour Auto | 2014 ANNUAL REPORT
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