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2012 ANNUAL REPORT
34
Financing Businesses
GB Capital acts as GB Auto’s financial
arm. The financing arm has three comple-
mentary businesses that offer financing
solutions to a diverse spectrum of clients
in Egypt ranging from major corporations
to small and medium enterprises (SMEs),
micro enterprises, and indivual retail
consumers.
GB Lease, the first of GB Auto’s financ-
ing businesses, was initially established to
support commercial vehicle and pas-
senger car fleet sales. However, it quickly
diversified its operations and now extends
lease financing for all asset classes.
GB Lease’s activities are non-exclusive to
GB Auto, and cater to a diversified client
base ranging from top tier multinationals,
to local corporations of various scales, as
well as small and medium enterprises. The
company fully complies with all regula-
tions and operates under the auspices
of the Egyptian Financial Supervisory
Authority (EFSA).
Microfinance venture Mashroey,
founded in late 2009, began operations
in March 2010. The company has proven
to be an important sales driver of two-
and three-wheeler products. The divi-
sion has actively grown its portfolio of
two and three-wheelers, which continue
to constitute the bulk of Mashroey’s
portfolio, accounting for c. 80%, and
now operates out of 46 branches nation-
wide.
Mashroey has expanded its product
offering to include motor tricy-
cles (a non-GB Auto product)
and is also adding in 2013 the
sale of GB Auto’s YTO agri-
cultural tractors to its suite of
products.
Finally, 2012 saw the
incorporation and launch of
Drive
, which comprises both
“Drive Auto Trade” as the
trading company for consumer finance
goods, and “Drive Finance” as a consumer
finance and factoring company.
Since its launch, the company has
managed a positive imprint in the auto
finance market and initiated widely suc-
cessful promotions for GB Auto’s Verna.
Drive’s initial mandate was to focus on
serving GB Auto’s Hyundai and Geely
passenger car sales out of GB Auto’s
showrooms during phase one of its
operations. However, the company has
now advanced its operational plans and
started an agreed upon expansion to the
firm’s independent dealer network, as well
as extending credit to finance retail client
purchases of brands that are not exclusive
to GB Auto, in addition to offering finan-
cial factoring services.
2012 Business Review
• Overall, the Financing Businesses
continued to grow while maintaining a
good asset quality, closing the year with
a gross profit margin of 27.9%, up 3.3
percentage points year-on-year. Please
note that the contribution of both
Drive and Mashroey to the gross profit
249.0
156.5
0.4
6.1
101.3
‘08
‘10
‘09
‘11 ‘12
Financing Businesses
Revenues by Year
(LE Million)
margins of the Financing Businesses
are understated as they exclude
intercompany accounts / sales with
Passenger Cars (for Drive) and two-
and-three wheelers (for Mashroey).
• In general, although the contribution
of the Financing Businesses to GB
Auto’s gross revenue is still limited,
management expects it will evolve
rapidly over the medium to long term
horizon to account for a significant
percentage of the group’s overall
profitability.