SHAH ALAM, 26 May 2008 – PROTON Holdings Berhad posted a third successive quarter of pre-tax profits and ended the 31 March 2008 financial year with a group pre-tax profit of RM162 million.

PROTON Chairman Dato’ Mohammed Azlan Hashim said the three successive quarters in the black point to better financial health for PROTON and this can be attributed to its focus on operational improvements and its perseverance, which are beginning to show positive results.

The improved performance was achieved on the back of increased revenues to RM5.6 billion compared with RM4.9 billion in the previous year. The increased revenue generated from increased sales volume, was mainly due to the introduction of PROTON’s two new models, the PERSONA and the SAGA. The group has also benefited from its revenue diversification program with income from sale of rights for use of its intellectual property, in its export markets.

June 20 (Bloomberg) — Malaysia’s government, seeking a partner for carmaker Proton Holdings Bhd., ruled out selling its entire 43 percent stake to Volkswagen AG, raising concern that disagreements over control will threaten alliance talks.

Volkswagen, the government’s preferred partner for unprofitable Proton, wants a “substantial” stake in the carmaker, Malaysia’s Deputy Prime Minister Najib Razak said in an interview.

“It’s the national car,” Najib said in Putrajaya, outside Kuala Lumpur, yesterday. “It can’t be all of the stake.”

Proton, set up to spearhead Malaysian industrial development 24 years ago, needs a partner after losing half its market share to competitors including Toyota Motor Corp. and posting its first annual loss in at least 17 years. Control of an alliance may be key for Volkswagen, which would gain access to Southeast Asia’s largest car market.

“The only thing I’m afraid of is this government will get emotional with this,” said Nordin Mohd Nasir, an analyst at Inter-Pacific Securities in Kuala Lumpur with a “trading buy” rating on Proton stock. “Proton doesn’t have much to offer. It’s still not visible how or when they will come up with this agreement.”

Proton, which sold six out of 10 cars in Malaysia a decade ago, needs an agreement with another company to develop new technology and models. An alliance with Mitsubishi Motors Corp. ended in 2004, and the Malaysian government missed its own March 31 deadline this year to find a new partner.

Manufacturing Division

Shares of Proton were unchanged at 6.25 ringgit in Kuala Lumpur, after falling as much as 0.8 percent earlier today. The shares have dropped 5.3 percent this year, trailing the 26 percent gain by Malaysia’s benchmark index.

Volkswagen possibly wants a stake in the manufacturing division, Najib said. Malaysian government investment unit Khazanah Nasional Bhd. owns 43 percent of Proton.

Andreas Meurer, a spokesman for Wolfsburg, Germany-based Volkswagen, said talks are continuing and declined to comment further. Volkswagen is Europe’s biggest carmaker.

Najib declined to say if acquisition talks are limited to Proton’s manufacturing facilities or to name other possible partners because talks haven’t ended. Offers and counteroffers have been “bandied about” and negotiating positions are always changing, he said.

Commercial Basis

“Whether we can give up a substantial stake, that’s the question,” Najib said. “Substantial means majority. Are we willing to give up a majority in the manufacturing side?”

Proton was set up in 1983 by then-Prime Minister Mahathir Mohamad. The state-run carmaker last month reported a loss of 591.4 million ringgit ($172 million) for the 12 months ended March 31, its first annual loss since at least 1991.

Protons, favored by taxi drivers across Malaysia, are among the cheapest cars in the country. The Saga saloon is still on sale more than two decades after the first model was produced.

Najib said his government is prepared to let a foreign partner run Proton without political interference. The government also hasn’t “closed the door” to companies other than Volkswagen, he said.

Commercial Basis

General Motors Corp., the largest U.S. carmaker, is among overseas automakers to have held talks with Proton. Local companies including Naza Group, which assembles and sells Kia Motors Corp. vehicles, and DRB-Hicom Bhd., which puts together cars for Honda Motor Co., have also indicated interest in Proton.

“If we want a foreign strategic partner then we have to accept the fact that it has to be run on a commercial basis,” Najib said.

Volkswagen may give Proton engine technology to install in its new models, said Jason Yap, a Kuala Lumpur-based analyst at Affin Securities Sdn. In return, the German company would want the freedom to run its own business in Malaysia, he said.

Control of Proton’s manufacturing unit may cost about 900 million ringgit, analysts including Chong Lee Len at Hwang-DBS Vickers Research Sdn. in Kuala Lumpur have said.

Najib also said he expects the Malaysian economy to expand 6 percent for a second consecutive year in 2008. The government isn’t in a rush to allow the ringgit to be traded offshore, and any strengthening by the currency should be “gradual,” he said.

http://www.bloomberg.com/

Make / Model Price (RM)

PROTON GEN.2 1.3 (A) 46,899.54
PROTON GEN.2 1.6 (A) 55,234.32
PROTON GEN.2 1.6 (M) 51,510.66
PROTON GEN.2 1.6 H-LINE (A) 58,919.46
PROTON GEN.2 1.6 H-LINE (M) 55,933.33
PROTON ISWARA 1.3 A/B (M) NPS 31,072.95
PROTON ISWARA 1.3 A/B (M) PS SE 35,494.73
PROTON PERDANA 2.0 V6 (ENHANCED 3) (METALLIC) 101,500.25
PROTON SATRIA NEO 1.3 (A) 46,500.00
PROTON SATRIA NEO 1.3 (M) 43,500.00
PROTON SATRIA NEO 1.6 (A) 51,500.00
PROTON SATRIA NEO 1.6 (M) 48,500.00
PROTON SATRIA NEO 1.6 H-LINE (A) 54,800.00
PROTON SATRIA NEO 1.6 H-LINE (M) 51,800.00
PROTON SAVVY 1.2 (M) 39,427.88
PROTON SAVVY 1.2 (M) (METALLIC) 40,267.13
PROTON SAVVY 1.2 AMT 42,050.07
PROTON SAVVY 1.2 AMT (METALLIC) 42,916.32
PROTON WAJA 1.6 (A) CAMPRO 59,899.23
PROTON WAJA 1.6 (M) CAMPRO 56,665.85
PROTON WIRA 1.5 (A) A/B 49,972.84
PROTON WIRA 1.5 (A) CE 48,744.14
PROTON WIRA 1.5 (M) A/B 47,476.58
PROTON WIRA 1.5 (M) PECA 42,346.08
PROTON WIRA 1.5 (M) PECA (METALLIC) 43,238.33
PROTON WIRA 1.5 (M) STD 45,428.78
PROTON WIRA 1.5 (M) STD (METALLIC) 46,383.41

Proton history

Thursday June 14, 2007

More talks good news for Proton

KUALA LUMPUR: News of a second round of talks within a few days of the initial meeting in New York is seen by analysts as a positive development for Proton Holdings Bhd to eventually ink an alliance with German giant Volkswagen.

Market expectation is that a deal could be done within a few short weeks as the parties are familiar with each other and know just what the shareholders of Proton require and what the company can offer in any partnership.

“There seems to a better understanding of what needs to be done to seal this,” said an analyst.

Prime Minister Datuk Seri Abdullah Ahmad Badawi announced on Tuesday that discussions with Volkswagen on a rescue plan for Proton had been fruitful.

“The fact that they want to have another round of discussions means that both sides are happy with the first results. Both sides are in positive mood,” he said.

Analysts say the nod for further talks in Bangkok could mean that Volkswagen will be agreeable to Proton’s long-term blueprint.

Such an alliance could see Proton maintain its branding and keep its presence in key markets in South-East Asia.

“The Proton brand will be in a position to gain market share and products,” said an analyst.

Once a deal is struck, Volkswagen would be able to bring to Proton a multitude of benefits, and key among the gains is products and technology.

With an attractive line-up of models, Proton would be able to take advantage of Volkswagen’s platforms and the development of new cars, improve the quality of its vehicles and utilise the spare capacity of its plants.

Analysts believe the partnership would adopt a similar model undertaken by Perusahaan Otomobil Kedua Sdn Bhd (Perodua), where the foreign party will control manufacturing activity.

In the Perodua model, sales and marketing are handled by the holding company.

Source:
http://biz.thestar.com.my/news/story.asp?file=/2007/6/14/business/18022670&sec=business