Reopen the X-Files of Proton Holdings Bhd

DR MAHATHIR ON PROTON - MV AUGUSTA

I hope this piece of news on 11 April 2009 was not missed by anyone. Mahathir: PAC Should Check MV Agusta Sale If Evidence Calls For It .

Given that our politicians who are supposed to be providing check and balances are on a "power grabbing, conspiracy stories" spree, I doubt they even bother to read that.

Tun Dr Mahathir, the Advisor of Proton (I hope he is still Advisor), said that

"If they (PAC) have any evidence, they should (call up Proton to provide explanation). I think it is very wrong. You buy for RM300 million and sell for RM4."

Dr M was responding to PAC's call to Proton Holdings on the sale of MV Augusta for 1 Euro. It seems that the chairman of PAC Datuk Seri Azmi Khalid wanted Proton Holdings to provide an explanation for the sale in 2006.

This was the old video during the Dr M - Proton quarrel.

PROTON FINANCIAL STATEMENTS

If we take a look at the revenue of Proton, it is bouncing around the RM 5-6 billion mark, compared to approximately RM 7-9 billion in the previous era.

Proton's cash reserves also doubled from RM 626 mil in 2007 to RM 1.22 billion in 2008. I am not at all into Accounting subjects, so I definitely do not know how Proton managed to double their cash reserves all of a sudden.

Good thing to read is that the administrative cost of Proton was slashed by RM 100 million and operating expenses nearly halved as compared to 2007. Year 2007 was a bleak year for Proton and the company bled RM 589 million of losses.

In 2008, although Proton announced that the company jumped to a Profit of RM 184 million (from a RM 590 mil loss in 2007), we should not be too happy either.

If we consider the note 5(d), under the National Automotive Policy, the company was awarded RM 194 million in Research and Development Grant.

Without this piece of grant, and cost cutting measures, Proton must report losses of RM 10 million at least.


As for financial year ending March 2009, the annual reports are not out yet but back in February 09, an announcement was made for the 9 month performance of Proton.

Total revenue is at RM 5.084 billion, net profit before taxation is RM 54.36 million and net profit after tax is RM 21.16 million. Total cash balance slipped down to RM 1.158 billion.

If the complete and detailed financial report of 2009 comes out with another "Research and Development Grant" that exceeded the profit figure, then we know Proton is still bleeding.

Although they might not be in ICU, being in hospital is bad enough.

Of course a consolation for Malaysians is that carmakers around the world are going bust if not for their Government backing by tens of billions in US dollars and Proton remains strong with their cash balance (although losing money).

Proton in fact has strong assets although their cash balance is at RM 1.22 billion, significantly lower than in 2003 with RM 3.8 billion sitting idle in the bank waiting for an opportunity to beef up their R&D and sales department.

However, Proton must do something to make sure she doesn't lose out to competitors.

THE FUTURE OF PROTON

Make Malaysians proud, and we will stroll to the shops and buy a piece of this machine made with blood and sweat of young Malaysian engineers.




As far as I know, Proton is now in handshakes with Mitsubishi (again) and Detroit Electric (US-based firm) where Proton will have their hands on electric car technology.

Back in 2008, it was reported that Proton Holdings Bhd and Mitsubishi Motors Corp have agreed on a product collaboration that would see

1. Proton source a vehicle from Japan to replace the Waja and
   
2. Mitsubishi take the Persona and Exora to be marketed as Mitsubishis in certain markets.

And for those who like to criticise Proton as a milo-tin or biscuit-can car, the new Director of Quality is Dr. Wolfgang Karl Epple effective of 7 April 2009.

Dr Wolfgang

1. worked for BMW AG for 23 years
2. was BMW AG Vice President of Quality Management R&D
3. was BMW Project Director in Hybrid Cooperation project with Big 3
4. was in charge of BMW 3 series
5. was BMW South Africa General Manager for Industrialization

After being Prime Minister, these are the words of DS Najib Tun Razak to Proton's management.

"Proton has to become a company that is more competitive to ensure its survival in the automobile industry in the 21st century. All options must be considered for the national good. For this, Proton must look into having a strategic alliance to produce vehicles that are fuel-efficient and eco-friendly."

I hope to see Proton making use of this opportunity (heroes are born in crisis) when many carmakers are pulling out or scaling back due to liquidy problems, bankruptcy preparations or awaiting Government bailouts in countries like Japan, South Korea and US.

At least grab a stronghold in Asean markets !


p/s Congratulations and thank you to the Kedah and Perak State Government for believing in Proton again as the official State Government Car.

(Credits to Proton, TheStar and Malaysiakini for the photos)