PROTON Posts RM162 Million Pre-Tax Profit

3 Successive quarters of pre-tax profits

SHAH ALAM, 26 May 2008 – PROTON Holdings Berhad posted a third successive quarter of pre-tax profits and ended the 31 March 2008 financial year with a group pre-tax profit of RM162 million.

PROTON Chairman Dato' Mohammed Azlan Hashim said the three successive quarters in the black point to better financial health for PROTON and this can be attributed to its focus on operational improvements and its perseverance, which are beginning to show positive results.

The improved performance was achieved on the back of increased revenues to RM5.6 billion compared with RM4.9 billion in the previous year. The increased revenue generated from increased sales volume, was mainly due to the introduction of PROTON’s two new models, the PERSONA and the SAGA. The group has also benefited from its revenue diversification program with income from sale of rights for use of its intellectual property, in its export markets.

He added, that as a company that seeks to maximize long-term growth, PROTON understands the importance of introducing new products and models that meet the expectations of the market. This is clearly demonstrated by the good reception to the PERSONA and SAGA. As such, PROTON is committed to further enhance its R&D and product development activities with a view to further invest in projects that meet the requirements of the market and allow for quick commercialization. In the last financial year alone, PROTON spent over RM500 million on R&D projects and activities, in-line with this philosophy.

Given PROTON’s commitment to R&D and the development of locally-owned intellectual property, Dato’ Mohammed Azlan further underlined that PROTON has met the stringent requirements stipulated under the Government’s announced National Automotive Policy (NAP). In this regard, PROTON had qualified to enjoy the benefits of the facilities offered under the NAP. Facilities available under the NAP are available for any automotive manufacturer in recognition of efforts to increase the level of intellectual property created within the industry.

With regards to exports, Dato’ Mohammed Azlan said that exports performance in the fourth quarter showed significant improvement. Over 7,000 units were shipped compared to just over 1,700 units in the previous quarter. Total exports for the financial year is approximately 17,300 units.

For the current financial year ending 31 March 2009, given the new product range, PROTON expects to significantly improve its exports performance further. The PERSONA and SAGA are planned to be launched in PROTON’s major export markets from June 2008 onwards.

Managing Director Dato' Syed Zainal Abidin Syed Mohamed Tahir said the PERSONA, with its competitive pricing, stylish design and best-in-class attributes for ride and handling, cabin space and luggage space, has received 41,000 bookings since its launch in August 2007. Bookings for the SAGA, PROTON's most compelling value for money offer to-date, have exceeded 55,000 since its launch in January 2008. The contributions of the SAGA to sales volumes and revenues will be fully reflected in the current financial year.

He added in addition to successes in product portfolio, PROTON has also made commendable progress to bring about other operational improvements. The focus on cost management resulted in cost savings for new models, which were then passed on to the customers through competitive pricing.

Emphasis on the elevation of the automotive eco-system saw the strengthening of the vendor base and dealer network. These rationalisation initiatives enabled PROTON together with vendors and dealers to deliver improved quality of service and be more competitive.

PROTON will continue to strengthen itself in all aspects – operational, financial and corporate – to better equip itself in the years ahead. It will adopt a three-pronged thrust namely development of market-driven products, focus on high growth regional markets and a production strategy that achieves economies of scale.

Going forward, Dato' Mohammed Azlan said the launch of an MPV in early 2009 will see PROTON expanding its product portfolio and more importantly, its entry into a growing automobile segment. In terms of volume, PROTON has set itself the target of doubling its total sales volume to 300,000 units by 2010.

"We are all excited about our future direction and plans, now that we have laid the foundations for future growth. The various initiatives and adjustments to clean up all known legacy issues is beginning to show results as evident by PROTON already delivering on some of its promises with regard to product variety, product quality, export improvement, revenue diversification and efficiency improvement.

“We now look forward to see PROTON revving up and sustaining good growth in the future," said Dato' Mohammed Azlan.

About PROTON
PROTON, was established in 1983, and is Malaysia's 1st National manufacturer of automobiles. With operations in key market centers from UK and Western Europe to the Middle East, and across South-East Asia and Australasia, PROTON produces cars to suit a range of consumer demands and preferences. The offerings include versatile and reliable four-door family vehicles, two-door hatchbacks for the young-at-heart, luxurious and stylish executive sedans, as well as the world-renowned sports cars from Lotus.

PROTON's inception as a key driver of national development has seen the brand accelerate its learning curve through technology transfer with strategic partnerships and technical collaborations. PROTON cars are now steadily on track to achieving the mission for the future, gearing up to achieve the promise of a marquee which builds cars with passion and soul; cars which are a delight to drive and a pleasure to own.

Source: PROTON

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