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National carmaker’s revenue and profit up despite weak auto market
THE financial results delivered by Proton Holdings Bhd yesterday were a pleasant surprise yet somewhat of a rude shock.
The surprise was the manner in which profit and revenue grew amid a generally weaker environment for auto sales.
Backed by brisk demand for its three main models – Persona, Saga and Exora – which account for 86% of domestic sales, Proton smashed earnings expectations as it delivered on its strongest results in years.
The earnings of 14.9 sen during its second quarter was its best showing in six quarters and the second best since the final quarter of its 2006 financial year.
According to Malaysian Automotive Association data, Proton’s sales increased 9% in its second quarter compared with the previous corresponding period.
This at a time when industry volume was down about 3.5% against a year ago.
“We expect continued sales volume momentum and maintain our forecast for Proton’s sales volume to exceed the 150,000-mark for financial year 2010,’’ said UOBKayHian.
UOBKayHian in a note yesterday said it did not expect Perodua’s Alza, its MPV offering, to dent demand for Proton’s Exora.
The reason? The segment Proton is selling its MPV is less price sensitive and for those who count the ringgit and sen before buying a car, Proton had recently introduced a no-frills stripped down version of the Exora at RM57,000.
Apart from selling more cars, Proton’s earnings were also lifted by gains from previously undertaken rationalisation exercises.
The streamlining of its vendor and dealer network has led to a whole range of cost savings, some substantial over a short period of time.
“Increased efficiency across the board helped lower the average cost per unit by an estimated 3.9% quarter-on-quarter. The recent rationalisation of Proton’s dealership network has started yielding the desired results though the process has yet to be completed,’’ said CIMB Research in its note.
Proton managed to cut sales and distribution charges by 56% from the first quarter, thanks to the consolidation of its network with Edaran Otomobil Nasional Bhd.
Cost savings were also extended to administration charges and manufacturing overheads, which saw a quarter-on-quarter reduction of 7% and 6% respectively.
The company’s sales network too shrank from 278 at end-June to 265 at end-September. That reduction is still far from the planned 191 outlets Proton is looking at but it was good enough, on the back of higher demand for its vehicles, to lead to a bump in monthly sales per outlet.
During the July to September quarter, each dealer on average sold 50 cars monthly, which was a 25% improvement from the 40 cars per month average sold per dealership in the first half year.
More sales per dealer is essential in keeping its network profitable and happy.
“The shuttering of unprofitable and inefficient dealers immediately enlarged existing dealers’ trade area and coverage, which boosted sales per dealer outlet. This process is expected to continue,’’ said CIMB.
However, the rude shock from the results announcement was not how much fat Proton managed to cut. It’s the admission that there is a lot more to slash.
Proton said it can save RM530mil at the ebitda (earnings before interest, tax, depreciation and amortisation) level by financial year 2012/13 through an company-wide process re-engineering.
In short, there are a lot of efficiencies to be gained, a confession that would not surprise car watchers.
The better financial results and cost cutting saw Proton’s cash pile balloon to RM1.5bil, or RM2.32 a share. More savings expected to come in it will place Proton in good stead, considering the cash needed to fund its future plans.
For a start, Proton intends to operate like a global car company, and that means coming up with a car that will have global appeal and launching at least two models a year from the current one.
The global car would spearhead Proton’s attempt to penetrate the international market as relying on cars made for the Malaysian market would only take it so far.
Large amounts of cash too would be needed to turn subsidiary Lotus from a low priced and low volume sportscar manufacturer into one that is high priced and high volume.
Exploring green technologies like a hybrid or electric car, which Proton is already doing, will require cash, and maybe lots of it.
What sort of impact will this have on profitability?
Proton’s recent track record shows periods in which it posted better results only to slip back again. But this time around, that pattern may not be repeated.
“With management seeing sustainable margins, we expect Proton to deliver good results going forward,’’ said OSK Research in its note yesterday.
“Next year, Proton would be launching its centralised pre-delivery inspection hub, which would see its distribution cost being cut further as dealers will not be required to stock cars at their showrooms, which eliminates the rental cost for storage of cars.’’ it said.
Suzuki, Japan’s fourth-largest automaker and known for its strength in the compact car segment, said it would invest ¥20 billion (RM762 million) for a manufacturing site including engine assembly. It plans to start production of the 1.3-litre car in the southeast province of Rayong in March 2012.
Suzuki said it would build about 10,000 cars in the first year.
Bangkok has increased tax incentives to attract global carmakers to invest in output in Thailand of small passenger vehicles with certain specifications such as fuel economy of at least 20 km/litre under its so-called “eco car” project.
Car manufacturers investing in the project would enjoy cuts of up to 90 per cent in import tariffs on foreign car parts and material used for producing the vehicles.
Thailand’s state-run Board of Investment has also offered corporate tax exemption for at least five years provided their production of such cars reaches 100,000 vehicles a year in the first five years of operations.
Other Japanese carmakers such as Toyota Motor Corp, Mitsubishi Motors Corp, Nissan Motor Co, Honda Motor Co, as well as India’s Tata Motors Ltd, plan to the take part in the eco car project. — Reuters
P/S: Jim Roger said in his Book, A gift to my Children : Common Sense is not that common.
KUALA LUMPUR: Investors in the Swisscash Internet-based investment scam will now be able to get back part of their money following a consent judgment the Securities Commission (SC) entered into with two of the defendants in the case for a sum of RM31mil.
The SC said in a press release that the Swisscash scam involved an estimated total amount of US$83mil, which was what the Kuala Lumpur High Court ordered Albert Lee Kee Sien, Kelvin Choo Mun Hoe and Dynamic Revolution Sdn Bhd to pay in a judgment on Sept 25 last year.
According to SC chairman Tan Sri Zarinah Anwar, the SC entered into a consent judgement with Lee and Amir Hassan for the settlement sum.
She said the settlement was the largest ever in the history of the prosecution of such scams, which affected thousands of investors globally and prompted cross-border investigations involving seven other jurisdictions.
The previous largest settlement amount under the SC’s jurisdiction was RM2mil for insider trading in Padiberas Nasional Bhd, which was also distributed to affected investors.
“This is a milestone payout which is made possible following a consent judgment entered into with two of the Swisscash defendants,” Zarinah said, adding that the restitution would be based on a court-sanctioned distribution plan.
She told a media briefing yesterday that investors in illegal schemes could not expect regulators to get their money back for them as a matter of course. “Swisscash is an exception, in this case the recovery was only made possible not just by extremely painstaking efforts on our part but also by the close cooperation and support that we’ve been receiving from our counterparts in the various countries,” Zarinah said.
She said investors would have to show sufficient documentary proof of their principal investment and must not have been involved as recruiters in the scam. Investors who profited from their initial investment and still made claims would have their profits deducted from the claim sum while other criteria for consideration included whether investors heed the warnings by authorities before investing.
Zarinah said the first batch of restitution payments would be made early next year following approval from the court. She said 80% of the investors were male professionals and the profile was “not so typical of this kind of scam”.
She said to-date, there were 3,000 complaints filed against the scam.
This is bad news for those dumping NSTP when the 1st offered is announced.
Now , they did it again, TO REVISE THE TERMS OF OFFER TO GIVE BETTER OFFER AFTER ALL WEAK HOLDER DUMPING THEIR SHARES.
THE INSIDER MUST BE LAUGHING!
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KUALA LUMPUR: Shares of MEDIA PRIMA BHD [] and The New Straits Times Press (M) Bhd were voluntarily suspended from 9am on Wednesday, Nov 11 to 5pm on Thursday.
"The request for suspension is in view that the company will be making an announcement on the revision of the terms and conditions of the proposed offer," said Media Prima.
PARKSON is my main target, therefore I will invest more on PARKSON, ICAP & LIONIND.
(Picture: Penang Heritage )
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KUALA LUMPUR: MCA delegates made dramatic decisions at the party EGM on Saturday.
The vote of no confidence against Datuk Seri Ong Tee Keat got through by 14 votes.
His suspended deputy, Datuk Seri Dr Chua Soi Lek, failed to be reinstated as deputy president but was voted back as a member.
Party officials said the dramatic decisions of the delegates at the EGM would mean that they now need to look at the party constitution.
Under the Constitution, a party president can only be removed by a two-thirds of the delegates' votes.
Ong told reporters that he respected the results of the EGM.
He also said that the MCA Central Committee and Presidential Council will have to discuss the results.
Results of the voting on the three resolutions:
Resolution 1: That the members of the general assembly have no confidence in the leadership of president Datuk Seri Ong Tee Keat.
Adopt: 1155
Reject: 1141
Resolution 2: That the presidential council's decision on Aug 26 in accepting the recommendation of the disciplinary board and the subsequent decision of the central committee (if any) to expel or suspend Dr Chua is annulled.
Adopt: 1204
Reject: 1095
Resolution 3: That Dr Chua be rightfully restored as MCA deputy president.
Adopt: 1110
Reject: 1184
Earlier Saturday, of the 2,307 delegates who registered for the EGM, only 2,304 cast their votes from 10.30am to 11.55am. Three did not collect their ballot papers.
The total turnout of delegates was at 96.93% attendance rate.
Delegates had to show their party membership card and MyKad to collect the ballot papers
No photographers and reporters were allowed in the hall.
The EGM decided that only the first three resolutions be put to vote and the remaining two resolutions deemed irrelevant.
After opening the EGM, speaker Datuk Yik Phooi Hong put the suggestion to the delegates, who accepted this through the show of hands.
Resolution 4 and 5 were scrapped as no appointment of deputy president had been made as Datuk Seri Dr Chua Soi Lek was not sacked.
No disciplinary action would be taken against those who called for the EGM.
The registration process for the EGM began on Friday and closed at 10.30am Saturday.
Dr Chua, who arrived at 8.10am, told reporters that he would accept any decision made at the end of the day.
Vice-presidents Datuk Seri Liow Tiong Lai and Datuk Seri Kong Cho Ha also arrived early for the meeting.
Liow said he hoped the delegates would show maturity and make decisions in the best interests of the party.
Ong, who arrived at about 9.15am, was instantly greeted by his supporters, who cheered him on and gave him words of encouragement.
EGM guidelines state that any recount of votes would be allowed only if there was a difference of 1% of the total votes cast.
In the event of a draw, the speaker may exercise his right by casting an extra vote as provided for in Article 169 of the party constitution. But if the speaker elects not to vote, then lots would be drawn.
| 自贸区牵扯千万政治献金疑云 隆雪华堂：勿让政争模糊肃贪 | ||
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Malaysianinsider.com, KUALA LUMPUR, Aug 26 — A deepening financial scandal at a multibillion-dollar port development project is offering a behind-the-scenes look into the close ties between business and politics in Malaysia.
The mudslinging between senior politicians in the ruling coalition over the fiasco at the Port Klang Free Zone (PKFZ) is also giving Malaysians front-row seats to the strife besetting the Barisan Nasional (BN) government since it lost its two-thirds parliamentary majority in last year's general election.
“This whole thing is giving the opposition the ammunition to attack the government,” said a minister from Umno.
Like several other ruling-party politicians, this minister said the scandal — which has forced the government to bail out the project and stand by borrowings estimated to be in excess of RM10 billion — presents a major dilemma for Prime Minister Datuk Seri Najib Razak.
Unless the public spat is settled quickly and parties behind the huge losses at the scandal-ridden port project are held responsible for criminal negligence, Datuk Seri Najib's bid to revive his BN government's appeal with Malaysians is likely to face a major setback, government politicians said.
While financial bailouts, such as the rescues of scandal-tainted state-owned Bank Bumiputra and tottering steelmaker Perwaja Terengganu, were common during the 22-year rule of former premier Mahathir Mohamad, analysts say the scandal at the port comes at a time when the Malaysian public is growing intolerant of such abuse.
“I think the government needs to show that there will be no cover-up because the amounts here are huge. In these tough economic times, public anger will only be on the rise,” said the Umno minister, who asked not to be named.
It will not be easy, however, to investigate the PKFZ thoroughly, argue political analysts, because key protagonists in the row are major powerbrokers in the BN government.
Datuk Seri Tiong King Sing, a senior politician Sarawak, is the majority shareholder of Kuala Dimensi, the private company that built the port project after selling the land for the construction site to the government for a huge profit.
Shortly after Kuala Dimensi was singled out in a special audit report for billing discrepancies of close to RM1 billion, Tiong hit back with allegations that his company had provided the use of a luxury jet and donated RM10 million in political funding to Transport Minister Ong Tee Keat, who has been spearheading the probe into the financial shenanigans at PKFZ.
Datuk Seri Ong, who is president of the Malaysian Chinese Association (MCA), the ruling coalition's second- most senior party, has sued Tiong and insists that he did nothing wrong. But the allegations have nevertheless hurt his standing in the MCA, where he does not enjoy widespread support and is fighting a potential challenge from his deputy Chua Soi Lek.
In an apparent bid to distance the party from Ong's troubles, MCA treasurer Tee Hock Seng has said the party did not receive any funds from Tiong. He added that MCA “party leaders are not encouraged to accept donations in their personal capacity and all donations to the party must be made directly”.
The free-trade zone project began as a joint venture between the Port Klang Authority and the promoters of the Jebel Ali Free Trade Zone in 1999 to attract foreign investments to the port.
The land from the project belonged to Kuala Dimensi, which acquired the property in the 1990s for RM96 million, or roughly RM3 per sq ft.
The land was subsequently sold to the Port Klang Authority in 2002 on a commercial basis, for RM1 billion, or roughly RM25 per sq ft, government documents show.
The port authority later awarded Kuala Dimensi sole rights to develop the free-trade zone, which has been hit by cost overruns and mismanagement. — The Straits Times
Malaysianinsider:
PERMATANG PASIR, Aug 24 – Former MCA vice-president Datuk Chua Jui Meng dropped hints that embattled Datuk Seri Ong Tee Keat’s position as party president is under threat, insinuating at an ongoing conspiracy by Umno to oust him.
Chua, who quit the Chinese party to join PKR, told some 500 people in a ceramah here that many Umno leaders are unhappy with the way Ong is trying to expose the RM12 billion Port Klang Free Zone (PKFZ) scandal which, he alleged, would implicate many leaders from the dominant Malay party.
“Have you seen the prime minister coming out to defend Ong? Have you heard of the deputy prime minister defending Ong on the PKFZ scandal? Or were there any other Umno leaders, for that matter, that have defended Ong on the issue? No,” said Chua.
“This never happened before. Last time, there was this strong camarederie where leaders in Barisan Nasional (BN) would protect each other but this has not happened. The president of the second biggest BN component party is attacked and no one from Umno has come out to defend him,” added Chua,
He said the present situation, with BN component parties showing lack of cohesion and divided along racial lines, has caused disquiet among the people, especially the Chinese community.
This, coupled with widespread rumours among the ruling coalition’s inner circle that BN president Datuk Seri Najib Razak and deputy president Tan Sri Muhyiddin Yasin are dissatisfied with Ong’s presidency, preferring his deputy Datuk Seri Chua Soi Lek instead to lead the Chinese-based party, have undermined Ong’s position.
“All this shows that Ong’s claim that he is under attack, internally and externally, is true,” Chua noted.
In recent weeks, the MCA president has also found himself locked in between two battle fronts from within the party and BN.
Ong had worked hard to build up an image of being clean and transparent but his reputation is now in tatters following Datuk Seri Tiong King Sing’s allegations about a large donation and rides on private jets, and his position as party president is considered shaky with MCA deputy president’s supporters expected to push ahead with plans to call for an EGM to remove him.
Tiong is CEO of Kuala Dimensi Sdn Bhd (KDSB), the main developer of PKFZ and whose company is under investigation by Ong’s ministry. Tiong had dropped a bombshell when he claimed that he had made a RM10 million donation to Ong “for MCA party purposes”.
Ong had also confirmed that the party’s treasurer-general Tan Sri Tee Hock Seng has been called up by MACC regarding the RM10 million donation by Tiong.
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STUDYING THE ABOVE FACTORS, IT IS NOT DIFFICULT TO GET A CONCLUSION:-
THIS IS A GET RICH QUICK SCHEME!
EVERYONE THAT JOINT THEM IS HOPING TO EARN A FORTUNE IN SHORT TIME, THEY ALWAYS BELIEVE THAT THEY WILL NOT BE THE ONE WHO LOSE MONEY.
THEY WILL TRY TO BRING IN MORE NEW MEMBERS SO THAT THEY WILL GET RICH QUICK, THOUGH THE MEMBER THEY BRINGING IN MAY BECOME THE VICTIM LATER.
A SCHEME LIKE THIS WILL NOT LAST LONG.
WHY SACRIFICE YOUR RELATIVES & FRIENDS FOR OWN BENEFITS ?
Tengku Razaleigh also hit out at the MACC for investigating minor cases while ignoring major examples of graft.
He said that Malaysians no longer feel safe or secure if mere witnesses called in to give evidence to a graft busting agency could be found dead the next day. “I feel it is very bad for a country like this. We have been independent for 50 years. Must people called up for queries end up in a coffin?” he told The Malaysian Insider.
Teoh was the political aide to DAP state assemblyman Ean Yong Hian Wah.
Teoh was called in last Wednesday to assist the MACC in its investigations into alleged misuse of funds by his boss. He was found dead the next day, sprawled on the roof of the adjacent building to the MACC headquarters in Shah Alam.
Police are now probing his death and the Cabinet is expected to discuss widespread calls for a Royal Commission of Inquiry into the tragedy.
Tengku Razaleigh said calls for a Royal Commission of Inquiry into Teoh’s suspicious death would be of no use if the government does not follow through on its suggestions, pointing out that the government had ignored the recommendations of previous royal commissions such as the one that investigated the V.K. Lingam case of alleged judge fixing and on improving the police force.
He even likened the sidelining of previous royal commissions to “insulting the King.”
The former finance minister also spoke out against the performance of the MACC, pointing out that it has not been as effective as its counterpart in Hong Kong at wiping out the corruption scourge.
He hit out at the commission for allegedly going after potentially minor offences but ignoring the major ones, saying that the current MACC model needs to be reviewed.
“This is a question of death you know. People want to know. I want to know. How could it happen? To a witness, who is going to give evidence and he is not even a suspect over the spending of RM2,400. Some people with millions of dollars, they get away with it and are not called for investigation.
