When Proton announced that it made a pre-tax loss of RM4.3 million for for Q1 2005, it explained that it was due to a higher allowance for doubtful debts and higher component costs.
Higher component costs have been attiributed to the rising steel prices. But what about the higher allowance for doubtful debts? What doubtful debts are these? Aren’t car purchases financed upfront by the banks through hire-purchase schemes?
An industry source sheds some light through Dow Jones Newswire.
Apparently Proton dealers were persuaded to buy more cars during the quarter to artificially(?) drive up the sales. When these extra cars were taken, obviously the dealers could not pay for them as they do not have buyers yet.
Many of these cars did not manage to be sold, and Proton had to write back the sales of these cars as provision for doubtful debts.
This is not Proton’s official statement on the provision for doubtful debts figures however, so I think we should wait for an official statement before saying anything.
Source: Yahoo Business
Looking to sell your car? Sell it with Carro.
Perhaps not only to Malaysian dealers. Remember, Proton is striving to be a exporter of cars, so perhaps Proton have exported cars under credit to its subsidiaries overseas.
Who knows.
But I don't think that doubtful debts played a major role in pushing Proton to a net loss – unless an astronomical amount of their debts default, the doubtful debt ratio over debt owed ought to be rather so. Neither do I think higher component costs did much to affect Proton profit and loss account.
how come the share market for proton up yesterday ha. i thought they are suppose to be down. profit taking ka..
I think the "Doubtful Debts" is true !
But, the dealers' parts may just a tip of the ice berg.
Remember that earlier we saw tonnes of "Potong" cars stucked at the stock yard ?
I think there are where all the "Expensive" steel and "Doubtful Debts" goes.
LOL
What I am wondering about is whether there was a coordinated effort in the mass resignation that has been reported. Could Dr. M had known and fired the first salvo with returning the cars?
I guess "DOUBTFUL DEBTS" might caused by SAWI sales. Remember old days when ever POTONG launched any New MODEL, the Malaysian will books the car advanced or always fully booking. SO, POTONG sell director (without seeing SAWI before) thought that it is the same formula to apply on SAWI. Therefore predicted 5000 sold SAWI on the finacial account as PROFIT.
But so unfortunately the SAWI langsung tak LAKU, maka DOUBTFULlah??? Tak tahu macam mana record to BOSS, "DOUBT& FOOL DEBTS" can used to report the shareholder so that they can CLEAN their hands (CUCI TANGAN Lah).
Mungkin betul, Kalau kita pun DOUBT and FOOL by POTONG lei!!
proton is a very unpredictable company from the accounting perspective. i have been covering the carmaker as an investment analyst, and i find that u always have to expect the unexpected. we didn't expect proton to make bumper profits last quarter, and yet they did. in 2Q05, they recorded losses. proton should be made a case study for accounting students on how companies do accounting sleight-of-hand. i'll bet next quarter there would be a huge turnaround, maybe slightly under than needed to offset the 2Q05 loss. nonetheless, IMHO circumstances in proton are not as bad as it is with mas. proton was hit by severe competition, strong oil price etc but mas is plain and simple mismanagement. how can u explain the fact that passenger-km for lang-haul flights rose less than 10% but food and beverage costs doubled?
Actually this is sort of creative accounting to push the profit as low as possible then so that the next ceo can achieve a high profit. then the share price will goes up…. this is just what i thought of…
I think this is the beginning of a downward trend for Proton, so much obvious of the numbers of Savvy, Waja and Gen-2 pilling up at the Proton showroom, sitting under sunshin/rain, left to rust …
Proton might consider using the same strategy as Form and GM in US, give high discount rate for its own workers, it should help at least to offset some of the inventory burden. Even for Mercedes workers in Germany gets some nice plan to buy its own cars, some special loan or something….
… you sell cheap2, and you destroy the resale value. You wait around, and you can be sure that your rectification and warranty costs will shoot sky high, and you lose out on new model introductions … aiyooooh ! … who did you say is the new Proton CEO ? – maybe David Copperfield … oop's sorry, … local magician.
there is no solution to it, already there are some discount here and there being thrashed out, ie. lower interest rate for bank loan, higher trade in rate for your old car and some rebate…. just to name a few.
How about this Package:
BONUS 1: If you buy any POTONG new models, Free service and Free Maintance fee for 5 years and GET max. 48 hours repairs work done at WORKSHOP. In case of more than 48 hours you will get BRAND new car back home.
BONUS 2: Noise issue or looseness parts will be guarantee to fix by POTONG or EON Service center for 5 years, if not caused or modified by Customers or due to Crash.
BONUS 3: If you send your car to WORKSHOP you will get a replacement car until WORK done in case more than 1 days repair work is necessary or Free Shuttle bus and TAXI from POTONG will be available for you!
How's that folks? Will you consider buying a POTONG now? Or still buying HONDA or P2. Other Bonus is demading before go to next step????
Doubtful Debts? Doubtful about what?? not profitable or …. WHOSE POCKET DOES THE MONEY FLOWN INTO????
guys, just wanna share something. i dunt know if it's been posted here. check out the PRM (Putra replacement model) and read the article below. heheh. no pun intended.
http://www.kelisaclub.com/forum/index.php?showtop…
I agree with Jeremy. The new management will start with a fresh book, the next Q will show the true performance of Proton. With a huge amount of cash reserve, no way Proton gonna hit the slump so soon ( even FD will give substantial amount of return )
Hehehe, cant wait to see things to come for Potong……
KAWAN2 SEMUA ORANGE….How to sell POTONG cars lei?? ANY IDEAS?
CAN you all be a good sales Manager?? POTONG IS Looking for Sales man now!!!!
DOG THE WAN package is not BAD, I will consider buying POTONG if BONUS 1,2 & 3 added. WHY NOT?? MOU SIT TAI……LEI!! (Tak rugi mah!!)
I wish to get new cars every month lei!! YAHOOOOO!!
napps & Michael have good points :) interesting perspective– have to think about those. Too true, practical considerations also, people don't like to buy cars once their mfg year is past…
PROTON IS RUN BY CLOWNS AS ALWAYS.
The packages mentioned by DOG THE WAN will not take place simply because it requires extensive use of BRAINS to figure this out.
With the limitation of cells in the brains (There are rumors that Proton Management have lower brain cells count), they manage to come up with a "MALAYSIA BOLEH PACKAGE" while squating on their GOLDEN TOILET BOWL and washing their ASS with a GOLDEN HOSE that are hooked up with a DIAMOND WATER FILTER.
So the MALAYSIA BOLEH PACKAGE consist of the following:
BOLEH PACKAGE1:
Interest is higher than everyone else.
BOLEH PACKAGE 2:
FREE first three service -labor only. So we can recover back with the ridiculous price on parts and lubricant that we are going to charge you.
BOLEH PACKAGE 3:
We at PROTON always put our CUSTOMER NO1. We will continue fixing your problematic car again and again until the warranty is over.
BOLEH PACKAGE4:
If repair takes more than 24Hrs there will be no replacement car for you. But our friendly and polite customer service will ask you to bring back your car when you are free.
Anyone interested in getting a PROTON pls dial TOLL FREE NO : 1800 RIP ME OFF PLS.
Proton Holdings Bhd has sprung a surprise with the declaration of a final tax-exempt dividend of 10 sen or 10% per share totalling about RM55 million for the year ended March 31, 2005, despite slipping into the red in the first quarter of the current financial year.
“This comes as a surprise; why now and why final dividend and not interim dividend?†asked an analyst.
In a statement to Bursa Malaysia on Sept 5, Proton announced that the entitlement date for the tax exempt dividend would be on Oct 7, with the share price to be traded ex on Oct 5. It said the dividend was for the year ended March 31, 2005.
The analyst said it was good news for the shareholders and the recent losses in the first quarter was not relevant as the losses were mainly contributed by allowances of doubtful debts.
Proton slipped into the red with a net loss of RM12.35 million in its first quarter ended June 30, 2005. It suffered an operating loss of RM3.55 million compared to an operating profit of RM192.29 million a year earlier.
The loss contrasts with a net profit of RM166.47 million in the previous corresponding quarter. The first-quarter loss was despite a 6.8% rise in revenue to RM2.05 billion from RM1.92 billion a year earlier.
Proton on Sept 5 also issued a notice calling for its AGM on Sept 28, incorporating the proposed final dividend of 10 sen
Paul, don't you think this is a JUNKS report?
Where is the raw material cost? Sum it together with operating cost can hide a lots of information.
MOO,
Proton is managed by clowns. Clowns might be idiot and sometimes funny but they are definately not a spastic.
If they were to show the cost of raw material, it will show nsomething like this :
CEO's Wife's BRA RM5000
FACIAL TREATMAN RM10000
CEO"S UNDERWEAR RM6000
CAR FOR MAHATHIR RM1MILLION
FiveElement…wuahahahahahahaahahahahahahahaa…yea you are damn right ~~~~~~ thats what caused the 'doubtful' debts….director overspent the allowances…company kenot recover and kenot reveal to the public…so mar became doubtful debts lor….
Shut up lah FiveElement and abu..
almost condeming..
no post a FACT..
almost think by your closed mind..
Smells…. like abu and 5element is the same person here.. or maybe at the same office etc.
5 cakap abu sokong.. abu cakap 5 sokong.. any thread like that..
Paul! go check their IP .. huh!
mitsu,
Cant you see or tell that is a joke. If you do not have sense of humour who can you blame???
If you dont like it, just turn off your computer. Stop sulking like a baby.