Holden announces $128 million profit

Holden has posted an after-tax profit of $128.2 million for 2015, due to entirely to its imported vehicle range.

It's good news for the company, after three successive years operating at a loss. Holden's last profitable year was 2011, when it reported an $89.7 million profit. In 2015 the turn-around for Holden comes off the back of an improved business environment for the company's imported vehicle range.

Manufacturing continued to operate at a loss last year, dragging down overall profitability. But Holden says most of the costs associated with ending production in Australia have already been accounted for in 2015. Holden's decision to retain an engineering unit dedicated to engine calibration resulted in a once-off reversal of employment entitlements, to the tune of $79.7 million.

Consolidated revenue for the year reached $3.59 billion and before-tax profit was $194.8 million.

Selling 102,951 vehicles last year, Holden lays claim to 8.9 per cent of the market and is the country's third-placed automotive brand for sales.

"We're paving a profitable and sustainable future for Holden for the long term. Put simply, Holden is profitable on our imported vehicle range, while our manufacturing business continued to run at a loss in 2015," Holden Chairman and Managing Director, Mark Bernhard confirmed today.

"We recorded significant charges, and therefore losses, in 2013 and 2014 due to asset impairments and employee entitlements. This is the cost of looking after our people and ensuring an orderly wind-down, and that remains our unwavering commitment.

"We're excited by our future and long-term vision of once again becoming Australia's best automotive company. We'll make this happen by launching 24 new vehicles by the end of 2020, putting the customer first, remaining a key part of our local communities and rejuvenating our brand to reflect today's Australia. It's a big job, but we have the plans and the people to do it."

"These financial results reinforce our confidence in those plans and our future. We acknowledge that some financial one-off items, such as the decision to retain our powertrain engineering department, positively impacted our profit numbers, but the bottom line is that Holden is profitable as a fully-fledged importer of vehicles and we have a very bright future.

"Our manufacturing arm continues to face the insurmountable economic challenges that led to the industry-wide decision to cease local manufacturing. A high cost-base, insufficient economies of scale, fluctuating Australian dollar, a fragmented and ultra-competitive market – none of these factors have changed and building cars in this country remains unsustainable.

"Our manufacturing colleagues should be highly commended, however. Right now, the men and women at our Adelaide factory are building the best quality cars they have ever built and have been recognised globally by GM for their ongoing cost reduction and efficiency programs.

"Holden's operations and business will continue to evolve. What won't change is our commitment to our customers in Australia and New Zealand. There is no doubt we are facing some stiff challenges, but step by step we are building a winning long-term future."

Since the establishment of the National Sales Company business arm at Holden – to carry on post-manufacturing as a full-line importer – Holden has been a company of two halves, the other being the manufacturing component, which is running at a loss and will wind up some time during 2017 with the closure of the Elizabeth plant in Adelaide.

Last year Holden's R&D efforts totalled $70.9 million, and the company paid taxes of $193.6 million. After the end of local manufacturing, Holden will continue to employ around 700 people in its on-going facilities such as the corporate headquarters in Port Melbourne, its design studio, engineering, parts distribution centre and the Lang Lang proving ground.