Proton etched out a small net profit for 2Q2009

Proton announced its results for 2Q2009 ended 30/9/2008, where its net profit dropped 16% q-o-q to RM43.8 million on the back of a 7.6%-increase in its turnover to RM1.84 billion. Compared the previous corresponding quarter, Proton's net profit is up eleven folds while turnover is up 41%. Despite the improved performance, Proton's profitability is very tentative. Its revenue for 2Q2009 is the same as its operating expenses of RM1.84 billion, while for the 1H2009, revenue totaling RM3.55 billion exceeds operating expenses by RM12 million. The fact that Proton has managed to report net profit of RM43.8 million for 2Q2009 [& RM95.8 million for 1H2009] was due to Other Operating Income of RM53.3 million [& RM97.4 million for 1H2009] and Share of Results from Associates & JVs of RM8.0 million [& RM12.8 million for 1H2009].



As noted in my previous post (here), Proton made a new all-time low of RM1.60 on November 24. The share price has however recovered somewhat over the past three days and the feared selldown did not materialize.


Chart: Proton's daily chart as at Nov 27, 2008 (source: Quickcharts)

Based on the poor technical outlook & unconvincing financial performance, I think it is best to avoid Proton, given the availability of many attractive stocks to choose from.

Note: Proton has finally renewed the contract of Proton’s managing director, Dato’ Haji Syed Zainal Abidin Syed Mohamed Tahir.