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Why is Proton going to Indonesia when the waiting list in Malaysia is more than 3 months for their MPV, Exora? I know going for international market is good for business but Proton is short changing its own fellow Malaysia. I would understand Proton going outside Malaysia if the waiting time for Exora locally is about 1 months. It would means that the factory has surplus production. Anyway, below is the extract from The Star:

Managing director Datuk Syed Zainal Abidin Syed Mohamad Tahir said the first half was a challenging period but things were starting to look up for the national carmaker since the launch of the multi-purpose vehicle (MPV) on April 15.  Proton Holdings Bhd expects its Exora to beef up sales and help mitigate the impact of the global economic downturn.

“We are lucky that we have the Exora. It has helped improve our performance to some extent,” he told reporters after the My Proton Journey programme at the company’s Centre of Excellence yesterday.
Datuk Syed Zainal Abidin Syed Mohammad Tahir: »Bookings have been stable«

“Bookings have been stable. The financial institutions have been supportive and we are also happy with the Government for coming up with the scrap programme. This is helping us to recover from the economic downturn,” Syed Zainal added.

According to a Proton official, there have been 15,767 bookings and 6,200 registrations for the Exora since its launch.

Proton aimed to sell 36,000 units of the Exora in the financial year ending March 31, 2010 (FY10), he said, adding that its total vehicle sales target for the period was 150,950. Proton sold 141,000 units in FY09.

Syed Zainal said the carmaker would launch the Exora in Indonesia on Friday, and he was optimistic that the MPV would be well received.

He said the second half of 2009 would be a challenging period.

“Towards the Hari Raya period, demand would be stronger. But towards the end of the year, there would be a dip, which is why we need to come up with initiatives to excite the customers to come to the showroom.”

Meanwhile, the My Proton Journey programme will be a monthly initiative where as many as 15 of its newest buyers will be randomly selected to visit its plant in Shah Alam.

Customers can also test-drive Proton and Lotus cars at the company’s in-house test track at the same location.

Syed Zainal said the programme was part of Proton’s initiative to communicate better with its customers on issues such as product changes, progresses and developments.
Datuk Syed Zainal Abidin Syed Mohamad Tahir says Proton will launch the E xora in Indonesia on Friday

He also said the programme would act as a means for Proton to address any misconceptions the public might have about the carmaker, especially on the qualitative aspects of its products.

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AXIATA Group Bhd, formerly known as TM International Bhd, will see growth in 2009 driven by its operations in Indonesia and India, while a steady Celcom (M) Bhd will provide the bedrock for strong cashflow.

“Axiata isn’t just a name change. We are transforming from good to great,” says its president and group CEO Datuk Seri Jamaludin Ibrahim (pic) in an interview with StarBizWeek.

He says by end of this year, Axiata’s debt to earnings before interest, tax, depreciation and amortisation (EBITDA) ratio, a measure of a company’s ability to repay debt, will improve from 4.6 times (x) as of December 2008 to 2.95x post rights issue and further debt repayment.

It will also complete all changes among its board members, management team, operating companies as well as middle management in its operating companies, says Jamaludin, pointing out that major improvements in talent, procurements and processes are even more vital during tough times.

The Indonesian headache

One of Axiata’s growth catalyst going forward will be its Indonesian unit PT Excelcomindo Pratama Tbk (XL), which disappointed in the fourth quarter ended December 2008 when it announced a surprise 15.1 billion rupiah (RM4.63mil) net loss.

During that period, Axiata sank into the red with a net loss of RM515.25mil from a net profit of RM519.91mil in the previous year, as a result of lower contributions from XL, forex losses and negative growth from Sri Lanka’s Dialog Telekom Ltd.

XL is presently the third largest player in Indonesia with a market share of 18%.

Indonesia has been one of the sore points among telco analysts due to its burgeoning fourth quarter losses, huge debts and funding requirements.

Since a high of RM7.85 in April last year, the counter has been on a downhill ride. More recently, it fell to a low of RM2.16 (March 18) when investors balked at the company’s cash call on concerns that it would be earnings dilutive. XL typically requires capital expenditure of some US$600mil to US$700mil annually. Nonetheless, the company only generates operating cashflow of some US$416mil. Hence, there are concerns as to how XL will fund this shortfall.

Furthermore, XL also has a debt obligation of some US$559mil due over the next two years.

“From a funding point of view, we’re in good shape. We can fund all our debt requirements. More importantly, we will be able to meet all the covenants of the banks,” says Jamaludin. He explains that due to XL’s huge expansion in 2008, XL will require a capital expenditure of only US$300mil to US$400mil this year from its typical US$600mil to US$700mil.

“Last year, we spent US$1.25bil on capex, which was a bit of an over-expansion. As such, we have huge capacity this year and don’t have to spend as much,” he says.

As to concerns on XL’s ability to repay its debt of US$559mil over the next two years, Jamaludin says it is exploring the possibility of raising between US$300mil and US$400mil through a bond issue.

“If we really have funding requirements, it can come from other companies within the group, namely Celcom,” says Jamaludin.

Meanwhile, Axiata will also launch its 3G services in India by this year.

Indeed, come June, Axiata will emerge leaner post renounceable rights issue of RM5.25bil.

Addressing debt

Axiata has paid Telekom Malaysia Bhd (TM) RM2bil of the RM4bil owed to the latter arising from the demerger of the companies last year.

The remaining RM2bil owed to TM will be repaid by the end of April in accordance with the terms of the de-merger. The RM4bil is due by April 24. There has been concern over the takeup rate of the cash call, particularly given softer earnings outlook against a challenging environment. Jamaludin says it ought not to be a worry as Axiata’s parent company, Khazanah Nasional Bhd, which owns 44.5%, will subscribe to its entire entitlement under the rights issue and subscribe to an additional 20% in the event of a shortfall.

The rights shares will be offered on the basis of five rights shares for every four existing TMI shares held at RM1.12 per rights share. It goes ex on April 10. KAF Research says the rights issue will increase Axiata’s share base by 125%, allows net interest savings of 2 sen on the enlarged share base and improve net gearing from 108% to 43%. “Our name change to Axiata reflects something bigger. It is our vision to be a regional champion and we improve in terms of size, values processes and the people that we have.”

“Despite the economic slowdown, I will not sacrifice my budget on talent management, and will continue to launch leadership development programmes,” he says.

Focus areas

Jamaludin says there are two main focuses for Axiata. The first is to concentrate on organic growth within the 10 countries it operates in; performance and processes will be coordinated and efficiency raised.

“The second is to be an MNC company. Our benchmarks are the likes of Shell and IBM. For this, we have to bring in people from MNCs. We must have the best. That is why, if you look at our management team, you wouldn’t know whether they come from an MNC or a GLC.”

Jamaludin admits that all the rhetoric in the world will be pointless if none of its subsidiaries see any traction in growth.

“Yes there are challenges. There are risks, as the countries that we are in, are not yet mature. If I sold all our subsidiaries today, I am sure our share price will rise. But over the long term, would that be wise?” he says. – The Star

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