Proton posts RM84m loss in 3Q2011

(Bernama) - National car manufacturer Proton Holdings Bhd’s pre-tax loss widened to RM84.054 million for the third quarter ended Dec 31, 2011 compared to a pre-tax loss of RM51.535 million in the same period in 2010.

In a statement, the company said the weaker performance was due to a decline in year-end sales which resulted in the adjustment of production numbers to better manage costs.

Revenue decreased to RM1.432 billion from RM1.833 billion previously.

Meanwhile, the revenue for the first nine months also dipped to RM5.92 billion from RM6.36 billion on the back of a RM36.530 million loss before taxation against a pre-tax profit of RM134.3 million recorded in the corresponding period in the preceding financial year.

Group chairman Mohd Nadzmi Mohd Salleh said the lower profit was largely attributed to lower revenue recorded from domestic sales.

However, the unfavourable impact from the lower revenue was cushioned by a decrease in manufacturing overheads and lower administrative expenses incurred in the same financial period, he said.

“Additionally, the result was also affected by lower volume sales of Lotus cars in Europe in the past quarter,” he added.

Furthermore, Mohd Nadzmi said the one-month delay of the launch of Proton’s latest model, the Exora Bold, had affected projected sales.

“However, the delay was necessary to ensure that all issues were addressed and that customers would get the best from the car,” he said.

According to the Malaysian Automotive Association, total vehicle sales fell 25% to 40,948 units in January from 54,781 units in the same period in 2010 due to tighter hire purchase loan approval requirements, shorter working month and further impact from Thailand’s flood disaster.

Mohd Nadzmi said following the sluggish performance of the industry, Proton expects challenging times ahead with further low sales volume after Bank Negara recently maintained that it will not review or adjust the new loan guidelines.

On its expansion strategy on the global front, he said the group is finalising plans to export left-hand drive Completely Built-Up (CBU) units of its models assembled in China to selected target markets.

Additionally, Proton Iran, which is 100%-owned by the group, was recently launched with the objective of serving after-sales demand of existing customers, he stated.

“The next step was to start selling cars in Iran again using the left-hand drive CBUs,” he added.

After the successful opening of the first full-fledged Proton Platinum showroom in Medan, Sumatra, the national car brand will open another Platinum showroom in West Jakarta to support the growing response in the Indonesian market.

Despite the challenges, Proton in a collaboration with Yes, a 4G network provider under YTL Communications Sdn Bhd, is due to launch Malaysia’s first in-car 4G Internet access in its high-end cars and the new sedan P3-21A next month.

Going forward, the group will continue to explore more opportunities to enhance and generate income from other business avenues, particularly through its after-sales services and parts.

As at Dec 31, 2011, Proton’s cash bank balances stood at RM1.18 billion.