Proton closed it’s financial year ending March 2006 with a profit before tax of RM28.2 million on total revenues of RM7.8 billion. Q4 results brought in RM1.8 billion in revenue for a profit before tax of RM95.3 million, which made up for the loss of RM4.3 million in Q1 and the loss of RM158.8 million in Q2.
Proton’s reduced profit was attributed to lower sales, higher allowances for doubtful debts and promotion costs, higher component costs and allowance for stock obsolescence. Income figures from associated and jointly controlled entities was also lower by 28%.
Proton’s MD Syed Zainal Abidin said the passenger car market sales dropped 9% in the Q4 period, but interestingly the SUV and MPV market grew 16% during that same period. This is probably why Proton wants to have a piece of that market as well. Syed Zainal said Proton would face a tough time ahead, with intense competition in domestic and export markets putting pressure on Proton’s sales and profitability. Higher oil price, electricity tariff, hardening of interest rate, tighter credit control and a decreased rakyat purchasing power are also negative factors.
Syed Zainal said the Satria Replacement Model will be launched in the first half of June, and two more new models wil be out before the new financial year is out. This means another two models before 31st March 2007. This might mean new models or facelifts.
As for the talks with PSA Peugoet Citroen, Syed Zainal said they have been going well, and the partnership is expected to be broader than the one it has currently with Mitsubishi. PSA Peugeot Citroen has confirmed that talks are being held but there is nothing concrete yet. Proton currently has partnerships with Volkswagen and Mitsubishi, and is in talks with Chery Automotive of China. It’s subsidiary Lotus Engineering is also in talks with JinHua Youngman, another Chinese automotive company. Proton also has an agreement with Petronas to jointly develop larger capacity engines of 1.8 litre to 2.2 litre. Proton’s own Campro currently serves the 1.3 litre and 1.6 litre range. Talks with an Indian partner are also underway.