Proton Announces Bouyant Financial Results 2007-08

30 May 2008 · posted by JMC

The introduction of new models including the Persona and Saga and a revitalised model line-up has led Malaysian car maker Proton back into profit for the first time in two years.

Proton Holdings Berhad announced it has posted a third successive quarter of profits ending the Malaysian 2007-08 financial year on March 31 with a pre-tax profit of $AUD 54 million (RM162 million).

Proton Chairman Dato Mohammed Azlan Hashim said the results follow three successive quarters in profit and point to better financial health for the company.

“Our success can be attributed to a focus on operational improvements and as a result of perseverance, factors which are beginning to show positive results.”

The improved performance was achieved on the back of increased revenues which were up by AUD $230 million (RM700 million) to $AUD1.86 billion (RM5.6 billion) from $AUD 1.63 billion (RM4.9 billion) in the previous year.

The improvements in revenue and increased sales volume were due mainly to the introduction of Proton’s new Persona and Saga models.

The group has also benefited from its revenue diversification program with income from sale of rights for use of its intellectual property in export markets contributing to the result.

Dato Mohammed Azlan added that Proton as a company has focused on maximising long-term growth and the importance of introducing new products and models that meet the expectations of the market.

“This has been clearly demonstrated by the Persona and Saga and the reception they have received in the market.”

“Proton is committed to enhancing its R&D and product development with further investment in projects that meet the requirements of the market and allow for rapid commercialisation,” said Dato Azlan.

In the last financial year alone, Proton has spent more than $AUD166 million (RM500 million) on R&D projects and activities.

Proton’s commitment to R&D and the development of locally owned intellectual property meets the Malaysian government’s current National Automotive Policy, which is designed to ensure automotive manufacturers increase the level of engineering skills and design expertise within the industry.

Dato Mohammed Azlan said that export performance in the fourth quarter showed significant improvement, up more than 400 percent on the previous quarter. Total exports for the financial year were also up significantly with plans for new markets expected to see a rapid upturn in non-domestic sales over the next 12 months.

Proton’s medium term plan up to the 2016 financial year, will see the company focus its efforts in the high growth markets of South-East Asia, China, India, the Middle East and North Africa.

“The company will also maximise localisation to reduce costs and will look at multiple production hubs,” said the chairman.

He said the plan would also see Proton cut the number of platforms to two while increasing its core models from three to five by financial year 2010/11.

“For small volume models we will look to forming collaborations with other manufacturers,” he added.

Managing Director Dato Syed Zainal said the profit result underlined the success of the company’s recently launched new models.

“Persona, with its competitive pricing, stylish design and best-in-class ride and handling, cabin and luggage space, has logged more than 40,000 orders since its launch in August 2007.

“Saga has been an even bigger success with more than 55,000 orders since launch in January however we will not see the increase in sales volumes and revenues from Saga until the end of this financial year,” said Dato’ Syed.

“Proton has also made strong progress in bringing about other operational improvements including a focus on cost management, resulting in savings in the development of new models which were then passed on to customers through competitive pricing,” he said.

“Proton will continue to strengthen all aspects of its operations to better equip itself in the years ahead, developing a three-pronged thrust targeting market-driven products, focussing on high growth markets and implementing production strategies that achieve economies of scale,” he added.

“The launch of an MPV in early 2009 will see Proton expand its product portfolio and in terms of volume, we have set a target of doubling total sales volume to 300,000 units by 2010.

“We are excited about our direction and plans, now that we have laid the foundation for future growth which is already beginning to show results.

“We are already delivering on this promise with better product variety, product quality, export performance, revenue diversification and efficiency,” he added.

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