Lotus spending saps Group's Q2 profit at RM47 million compared to RM185 million recorded in the corresponding period last financial year.
PROTON Holdings Berhad announced an unaudited Group profit before taxation of RM35 million in the second quarter of its 2011/12 financial year, driven by an increase in sales and stronger demand for higher margin models.
During the quarter under review, the Group registered revenue of RM2.26 billion compared to RM2.24 billion recorded during the corresponding period in the previous financial year.
The Group's profit before taxation for the six months ended 30 September 2011 however, was lower at RM47 million compared to RM185 million recorded in the corresponding period last financial year. The lower profit was largely attributed to higher spending by Lotus Group International Limited (LGIL), mainly on capability enhancement, infrastructure development and marketing costs, in line with its five-year business transformation plan.
Well into the second year of its business transformation plan, LGIL continues to stay on target with key achievements made in the quarter, which includes the successful unveilings of the Exige S, Elise S and the Evora GTE road car at the Frankfurt Motor Show; and the launch of the improved Evora MY12. Lotus has also announced its return to rally with the Exige R-GT, 30 years after its last World Rally Championship win.
"There have been several favourable milestones achieved recently by Lotus, namely; the successful bid for a GBP10.4 million grant from the United Kingdom Government; and the successful opening of the first official Lotus showroom in China. To date, Lotus China’s book order has exceeded 300 units, and with more showrooms to be opened across China, Lotus is confident of its sales volume increasing further. We are also relieved that Group Lotus has now become the sole owner of the Lotus name in Formula One, after we recently reached an amicable settlement with 1Malaysia Racing Team;” said PROTON Holdings Berhad Group Chairman Dato Sri Mohd Nadzmi Mohd Salleh.
Dato’ Sri Mohd Nadzmi added that the Group will continue to remain cautious and at the same time intensify its marketing activities moving forward. “We are mindful that the remaining half of the year is going to be even more challenging for us. For that, we will do all it takes to continue to be creative in facing these challenges. As a company, we will work towards further improving our operational excellence and efficiency, as this will also be an investment for our future in the long run.”
PROTON had further strengthened its presence in Indonesia with the recent opening of the first full-fledged PROTON Platinum showroom in Medan, Sumatera. The popularity of Proton cars also continues to remain strong in Indonesia. Recently, the Exora Star won an award from MobilMotor magazine’s ICOTY (Indonesian Car of the Year) under the Best Small MPV 2011 category. The Exora Star was also awarded the “Best Budget MPV 2011” earlier this year at the Indonesian Automotive Awards.
The recognitions have helped boost PROTON’s sales in Indonesia as well as attract potential parties to join PROTON’s dealership network, which will further help to extend PROTON’s sales and service coverage in Indonesia.
On the domestic front, overall Malaysian passenger car sales recorded a lower volume in the first nine months of 2011 compared to the corresponding period last year. According to the Malaysian Automotive Association (MAA), the decline in TIV for September was mainly due to shorter working month, and market condition was originally expected to normalise in October. However, the upward trend is unlikely to be strong for the rest of calendar year 2011 due to seasonal slowdown towards year end, and the impact of the floods in Thailand, which has disrupted both CKD/ CBU as well as parts supply from Thailand in November.
“The increasing demand for Proton cars in the domestic market, notably for our higher-priced models, the Exora and Inspira, positively reaffirms the various initiatives that are currently being undertaken to elevate and strengthen PROTON as a competitive global automotive player,” said PROTON’s Group Managing Director Dato’ Sri Haji Syed Zainal Abidin Syed Mohamed Tahir.
Dato’ Sri Haji Syed Zainal Abidin added that the initiatives include the launch of PROTON’s new global car in 2012; its advancement into electric and hybrids models; strategic collaborations to enhance and expedite model development and overseas market penetration; and greater emphasis being placed on innovation and the development of human capital. “For PROTON, the scheduled launches of new variants for the Exora, as well as the launching the P3-21A new global car, are expected to further boost both our domestic and international sales volume and market share,” said Dato’ Sri Haji Syed Zainal Abidin.
The P3-21A will be the first of PROTON’s new generation of global cars that are being built to the latest global rules and regulations which govern various parameters such as emission and safety standards. In line with aspirations of becoming a global car manufacturer, the Group’s fleet of Saga electric vehicles and Exora range extender electric vehicles that are currently being used by the Government of Malaysia are also expected to be made commercially available by 2013.
Earlier this month, PROTON had performed commendably at the 2011 Brighton to London Future Car Challenge, with the Saga EV, Exora REEV and Persona EV. The Exora REEV won the Most Efficient Multi-Purpose Car (Prototype) and the Best Overall Extended-Range Vehicle (E-REV) – this was shared with the Toyota Prius Plug-In Hybrid.
PROTON was also a dominant force in motorsports in 2011, clinching the coveted Asia Pacific Rally Championship Manufacturer’s and Driver’s titles after winning the APRC Rally of China. PROTON’s victorious season also saw it become the first car manufacturer to win all eight major individual titles in the championship: the overall FIA APRC manufacturer’s title; FIA APRC driver’s title; the FIA APRC Teams Trophy; the FIA Asia Cup driver’s title; and the FIA Pacific Cup driver’s title. PROTON’s Group N 1600cc two-wheel drive Satria Neo meanwhile, helped to clinch the remaining three titles that included the manufacturer’s title in the FIA APRC Rally Cup for two-wheel drive category; the FIA APRC Rally Cup two-wheel drive driver’s title; and FIA APRC Junior Cup driver’s title.
The successful motorsports campaign has opened up opportunities for PROTON to generate new revenue lines, to leverage on its growing popularity, especially among motorsports followers. In addition to creating new revenue stream through merchandising, the successful motorsports campaign has also increased global awareness on the PROTON brand and demand for R3 products, as well as renew customers’ interest on all Proton product range.
As at 30 September 2011, PROTON’s cash bank balances remain healthy at RM1.3 billion.
FINANCIAL HIGHLIGHTS Q2 2011/2012 (As at 30, September 2011)
2011/2012
(30/09/2011)
RM'000
|
2010/2011
(30/09/2010)
RM'000
| |
Profit before taxation (Q2) – individual
|
35,418
|
81,265
|
Revenue (Q2) – individual
|
2,263,272
|
2,240,509
|
Cash, bank balances & deposits (unaudited)
|
1,307,648
|
1,272,787
|
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