São Paulo – In the first quarter, bus body production dropped at the Marcopolo plant in Egypt. According to the quarter one balance sheets published this Monday (7th), from January to March, 52 units were manufactured at the company’s Egyptian plant. In the same period of 2011, 60 buses were made. The company’s target as of the plant’s inauguration was to produce 1,000 units per year, but the plans were frustrated by the decline in economic activity due to the Arab Spring.
According to the Marcopolo Investor Relations director, Carlos Zignani, the political turmoil that took Egypt by storm starting in 2011 caused a disruption of operations at the plant in its early years of existence. The unit became operational in August 2009. As a result, the negative impact of production did not affect the company’s results as a whole. “Last year, the revenues generated at the plant were equivalent to less than 1% of Marcopolo’s overall revenues,” he said.
Still, the company’s branch in Suez, Egypt, owned in partnership with the GB Auto company, is not generating dividends to the group. “Due to these issues, customers did not trust us with renewing their fleets. The tourism industry was badly hit, so they did not buy buses, the volume of credit available dropped, and we had no orders placed. Al of that influenced our results,” says the executive.
Zignani believes the situation should remain the same throughout 2012, but claims that Egypt has the potential to generate strong results for Marcopolo in the future. “The country is a major consumer of buses; it has manifold commercial ties to Middle Eastern countries, and a population of 80 million people. We are developing a new family [of vehicles] to meet the demand fast as soon as it arises. It is a matter of time,” he says.
The Egyptian plant has not given the expected results yet, but other Marcopolo plants performed well in the first quarter. One such case was the branch in India, which manufactured 2,095 units this year, 66% more than in the first quarter of 2011, when 1,262 vehicles were made.
Worldwide, Marcopolo made 7,589 buses in the first quarter, a 10.3% increase over the 6,881 units made from January to March 2011. Quarter one revenues reached 880.7 million reals (US$ 456.3 million) this year, a figure 15.7% higher than in the first quarter of 2011, and a net profit of 78.4 million reals (US$ 40.6 million), 3.4% higher than I the same period of last year. Targets for 2012 include posting revenues of 3.6 billion reals (US$ 1.8 billion) and manufacturing 32,500 buses. The company expects to sell the bulk of its output to the domestic market, Latin America, and West Africa.
*Translated by Gabriel Pomerancblum
