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16 • 2017 ANNUAL REPORT
Management Review and Financial Performance
expected to do well in the coming quarters of next year,
bolstered by its strong partnership with GB Capital ’s
Mashroey, which operates a network of locations offer-
ing asset-based lending for three-wheelers.
We are strong believers in the Commercial Vehicles &
ConstructionEquipment lineof businessdue to the ramp-
up in investments in infrastructure development inEgypt
and the government turning its attention to transport
demand. GB Auto anticipates the segment is poised for
growth in2018with the company beginning the yearwith
orders in hand. The division is gaining traction particu-
larly in the truck and bus segments as tourism picks up
and private sector business slowly returns to themarket.
The After-Sales division is one that has come into par-
ticular focus during the year in part due to the com-
pany’s revenue-diversification strategy and because of
the high demand the business enjoys following price
increases on new cars, which has left customers seek-
ing out GB Auto’s After-Sales network to maintain
their current vehicles. Having performed exception-
ally well in 2017, the company is ramping up plans to
expand its workshop network, looking to open centers
inMinya, Aswan, Tanta, MarsaMatrouh and Damietta
within the next two years. Plans are also underway to
construct a truck and bus workshop in Abu Rawash.
The Tire division should see a similar uptick going
forward, with solid performance seen in 2017. In 1Q18,
the Tires division will begin distributing Turkish-made
tuk-tuk tires, a profitable segment where the company
expects to leverage its strongmarket position.With the
aimof sustaining its growth in the truck-bus radial seg-
ment, the Tires division will also commercialize Pire-
lli and Pharos Truck tires starting February 2018. The
company plans to drive improved profitability across
the division going forward, with GB Auto looking to
reinforce its brand portfolio with the distribution of
additional reputable brands and negotiations already
underway with new potential partners for the year. The
company is also formulating individual teams for its
brands to create a tailored and streamlined process.
GB Auto continues to take a measured approach to its
Regional activities, opting for long-term growth rath-
er than short-term payoffs. The Iraqi market saw an
uptick in 2017 despite prof itability being hampered by
inventory liquidation, with both Passenger Car and
Motorcycle and Three-Wheelers enjoying increased
volumes. Management remains optimistic about the
division’s prospects for 2018 as it seeks to replicate
the success of its home market in the country.
Finally, we note that guidance going forward remains
subject to change in light of fluctuating regional geopo-
litical andmacroeconomic conditions in both our home
market of Egypt and the rest of our regional footprint.
We have reimagined
the Group as not solely
an automotive leader,
but a full-fledged
diversified player,
capturing a wealth of
opportunities in the
market.
2017 ANNUAL REPORT
•
17
Group gross profit
11.1
%