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2017 ANNUAL REPORT • 39
PAL is GB Auto’s lubricants business, distributing Gaz-
prom Neft-Lubricants at GB Auto-branded and third-
party points of presence in the Egyptian market under
an exclusive strategic alliance with Gazprom Neft. The
company announced in January 2014 that it entered
into an exclusive strategic alliance to distribute Gaz-
promneft Lubricants, giving GB Auto access to a 400-
450 tons per year market that grows at an annual pace
of 2-3%. The company aims to take the partnership to
other regional markets, possibly incorporating other
lines of business from Gazpromneft’s downstream
portfolio, following a successful rollout in Egypt at
both GB Auto-branded and third-party points of sale.
GB Auto’s Retail arm operates retail after-sales outlets,
known as 360, to distribute tires, tire parts, batteries,
parts and lubricants.These points of presence also offer
services including tire installation and balancing, bat-
tery services, and the sale and injection of lubricants in
select locations.
The company’s western-style pre-owned car operation,
Fabrika, is now operational at all GB-owned points of
presence in Egypt, with operations having started in
2014 and the market proving receptive. Management
anticipates further announcements regarding product
representations within GB Auto-branded service cen-
ters and third-party points of sale in the near future.
2017 Business Review
PAL operations showed substantial and promising
growth in 2017, as revenues jumped to LE 94.0 million
from to LE 62.7 million during the previous year. The
division has been exhibiting steady growth since its
launch, but has recently faced stiffer competition from
multinational counterparts who produce locally and
are not subject to the same FX challenges, allowing
them to bypass the impact of the pound’s devaluation.
Fabrika recorded sales revenue increases of 37.3% y-o-y
for FY17, with its top line coming in at LE 163.7 million
compared to LE 119.3 million last year. The company is
continuously expanding its product and services offer-
ings to better cater to its clients within this segment.
360, GB Auto’s after-sales retail outlets, have exhibited
significant growth since their launch in June 2016, with
revenues surging almost four-fold to LE 3.5 million.
Gross profit fromoverall startup operations was up 53.4%
y-o-y at the end of the year, at LE 45.3 million, while the
gross profitmargin grew2.2 percentage points to 15.8%.
Egypt
Others
Egypt Others
Other Sales Revenues by Year
(LE million)
2013
4.4
2014
79.0
2016
2015
218.5
27.4
2017
287.9
Other Gross Profit by Year
(LE million)
2013
-6.7
2014
9.0
2016
2015
29.6
-5.2
2017
45.3
38
•
2017 ANNUAL REPORT
2.3
%
of FY17 Group
Gross Profit