Proton’s 1Q net profit slumps 94%, Lotus weighs

KUALA LUMPUR: PROTON HOLDINGS BHD []’s net profit fell sharply by 94.6% to RM4.55 million in the first quarter ended June 30, 2011 from RM84.68 million a year ago largely due to the higher expenses incurred by Lotus Group International Bhd.

It said on Friday, Aug 26 that revenue fell 2.9% to RM2.23 billion from RM2.29 billion while earning per share were 0.8 sen compared with 15.4 sen.

Proton said its operating expenses were RM2.29 billion, higher than its revenue of RM2.23 billion in the first quarter. A year ago, its operating expenses were RM2.22 billion.

However, it benefited from higher other operating income of RM74.18 million compared with RM33.49 million a year ago. Pre-tax profit was RM12.11 million compared with RM104.65 million.

Inventories as at June 30, 2011 were RM1.284 billion compared with RM1.21 billion at March 31, 2011. Trade and other receivables rose to RM1.42 billion from RM1.32 billion during the three month period.

Proton, in its performance review, said the decline in the profit was largely attributed by higher expenses incurred by Lotus Group in the current quarter, which was in line with the group’s efforts in achieving Lotus Group’s long term business transformation plans.

The pre-tax profit was RM12 million in 1Q compared with the RM80 million in the fourth quarter ended March 31, 2011.

“In the current quarter, the group experienced a lower sales volume, mainly due to normalisation in the customers’ demand for the Inspira. The group also saw a drop in the financing approval rates by local financial institutions in June 2011, as a result of the Hire Purchase Act 1967 amendment implemented in the same month,” it said.

On the outlook, Proton said the group would step up its sales and marketing activities for the current offerings to increase sales volume and to increase income from after-sales related products and services.