GB Corp (CAI:GBCO) Q3 2024 Earnings Call Highlights: Record Revenue Surge and Strategic Growth Plans

GB Corp (CAI:GBCO) reports an impressive 85% year-on-year revenue increase, with strategic insights into future growth and challenges.

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Dec 10, 2024
Summary
  • Consolidated Quarterly Revenue: GBP16.2 billion, up 85% year-on-year and 59.4% quarter-on-quarter.
  • Net Profit: GBP746 million, increased by 12.6% year-on-year and 76.8% quarter-on-quarter.
  • GB Auto Revenue: GBP14.4 billion, up 88.1% year-on-year.
  • EBITDA: GBP1.7 billion, grew by 34.3% year-on-year with a margin of 11.7%.
  • Net Profit Margin: 3.9%, with net profit rising 16.9% year-on-year to GBP555.7 million.
  • Net Debt to EBITDA Ratio: 0.92 times.
  • Net Debt to Equity Ratio: 0.42 times.
  • GB Capital Loan Portfolio: GBP12.6 billion, increased by 19.8% quarter-on-quarter and 32.5% year-on-year.
  • NPLs (Non-Performing Loans): Improved to 2.1% from 3% in the previous quarter.
  • Projected Q4 Revenue for GB Auto: Approximately GBP15 billion.
  • Projected Q4 Gross Profit Margin for GB Auto: Estimated at 15%.
  • Projected Q4 Net Profit for GB Capital: Approximately GBP280 million after tax and minority interest.
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Release Date: December 09, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Consolidated quarterly revenue rose by 85% year-on-year and 59.4% quarter-on-quarter to GBP16.2 billion.
  • Net profit increased by 12.6% year-on-year and 76.8% quarter-on-quarter to GBP746 million.
  • EBITDA grew by 34.3% year-on-year to GBP1.7 billion with a margin of 11.7%.
  • GB Capital's loan portfolio increased by 19.8% quarter-on-quarter and 32.5% year-on-year to GBP12.6 billion.
  • NPLs improved to 2.1%, down from 3% in the previous quarter, reflecting enhanced portfolio quality.

Negative Points

  • The macroeconomic environment in Egypt remains challenging with high interest rates and currency fluctuations.
  • Income from M&T decreased in 2024 due to an 800 basis point interest rate hike.
  • Car registration issues persist, affecting the availability of completely built units.
  • High interest costs relative to net debt position, with an annual rate of 60%.
  • No specific guidance provided for 2025 earnings or subsidiary-level performance.

Q & A Highlights

Q: Why did the income from M&T decrease in 2024?
A: The prevailing macro environment has been challenging, with an interest rate hike of around 800 basis points affecting all NBFI players in Egypt. This is the main reason for the decrease in 2024. We expect performance to stabilize and improve as conditions normalize and interest rates are cut by the central bank. - Mohamed Naguib, Non-Executive Chairman of the Board

Q: Could you provide guidance on the number of passenger cars (PC) for 2024 and 2025?
A: For 2024, we expect to sell around 27,000 units in Egypt and approximately 15,000 units on the regional front. - Mohamed Naguib, Non-Executive Chairman of the Board

Q: Is there any update on the registration for cars?
A: The registration for completely built units is still not open, but we expect this issue to be resolved imminently, with some inflows starting. We hope the situation will be completely resolved by the beginning of next year. - Mohamed Naguib, Non-Executive Chairman of the Board

Q: Do you have any issues sourcing FX or facing import restrictions?
A: No, we do not have any issues sourcing FX, and import restrictions have been alleviated to a very large extent. - Mohamed Naguib, Non-Executive Chairman of the Board

Q: What is the expected growth in the lending portfolio for 2025?
A: We expect to see a growth of about 20% in our overall lending portfolio for next year. - Mohamed Naguib, Non-Executive Chairman of the Board

Q: Can you provide an update on the new factory capacity and any new factories in the pipeline?
A: There are no new factories in the pipeline. The projected capacity for the new factory is about 50,000 units. - Mohamed Naguib, Non-Executive Chairman of the Board

Q: What is the CapEx guidance for 2025, and what is it directed towards?
A: We have about GBP3 billion of CapEx projected for next year, mainly directed towards finalizing the new plant. - Mohamed Naguib, Non-Executive Chairman of the Board

Q: What is the expected contribution of CKD in the product mix?
A: Currently, CKD contribution represents between 60% to 70% of our product mix, and we expect it to remain around the 60% level going forward. - Mohamed Naguib, Non-Executive Chairman of the Board

For the complete transcript of the earnings call, please refer to the full earnings call transcript.