Arab Today, arab today bumper profit for proton likely by fy2014 amid mitsubishi tieup
Last Updated : GMT 18:22:07
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Arab Today, arab today

Bumper Profit for proton likely By FY2014 amid mitsubishi Tie-up

Arab Today, arab today

Arab Today, arab today Bumper Profit for proton likely By FY2014 amid mitsubishi Tie-up

Kuala Lumpur - Bernama

OSK Research expects Proton Holdings Bhd to reap bumper profit by financial year 2014 on the back of the higher plant utilisation rate following the collaboration with Mitsubishi Motor Corp (MMC). However, it said, it was too early to state an estimate on how much profit would be seen then as the final kinks of the joint venture details have yet to be worked out. \"Furthermore, we caution there will still be risks of delays in Proton\'s launch of its new global compact car which is scheduled to be released in 2013,\" it said in a research note today. Proton and MMC will establish a joint-venture company in which the national car maker is likely to hold a 60-70 per cent stake, with the remaining held by Mitsubishi. The details will be announced in the coming two months as both parties are finalising on the pioneer status, investment and tax allowance incentives. Proton management is committed to invest RM800 million over the next two years for the joint venture, under which, Proton will produce power trains (casting, machining and assembly) developed by Mitsubishi. The power trains will be used for the upcoming new model launches by both Proton and Mitsubishi\'s global compact car and other upcoming model launches. The research house said that by having the power trains locally manufactured, Proton will save in research and development capital expenditure and the power trains are also potentially cheaper. \"Additionally, Proton will also enter into contract assembly with Mitsubishi which will see a projected volume of 60,000 units a year by 2013,\" it said. Proton management expects revenue derived from the assembly to be at RM4,500 a unit and this would translate to a total revenue of RM270 million a year. OSK Research said that while collaboration with Mitsubishi reflects the long-term outlook, the reality was that near term earnings would continue to be crimped by losses from Lotus. Other factors affecting Proton\'s near term earnings are intensifying competition in the domestic market and declining exports, it said. OSK Research maintained a \"sell\" recommendation on Proton with fair value unchanged at RM2.

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Arab Today, arab today bumper profit for proton likely by fy2014 amid mitsubishi tieup Arab Today, arab today bumper profit for proton likely by fy2014 amid mitsubishi tieup

 



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