Holden posts $90 million profit in 2011

Holden has announced today that it achieved an $89.7 million profit in 2011. That's a marked reduction from the financial result of $112 million in 2010, but still a strong result just two years after the company posted a $205 million loss.

According to the company, 60 per cent of domestic sales are locally-built models — since the Cruze small car commenced production at the Elizabeth (South Australia) plant. Holden CFO, George Kapitelli says too that the Cruze was one element of Holden's financial health, another being the company's restructure and cost-cutting programs.

“Local car makers face tough economic conditions with the high Australian dollar, higher prices and disruption in the local supply base and increasing competition and segmentation in the market,” said Kapitelli.

“After the financial crisis we reshaped our business to improve structural cost, reduce our reliance on exports and bring the Cruze into local production (pictured) so we could continue to make cars in Australia. Now around 60 per cent of our Australian sales are Australian-made cars, this is a great result.

“We’re running our business responsibly and sustainably for the long-term. We’re making a strategic contribution to Australia, we’re committed to advanced manufacturing in this country and we’re committed to creating new opportunities for suppliers.”

Consolidated revenue dropped back from $4.4 billion in 2010 to $4.3 billion last year. Once again, however, the difference was comparatively minor, when the 2009 figure was $3.8 billion. Holden blames the setback last year on dwindling large-car sales — with the whole segment going through a rapid transition as buyers desert — and stock shortages of imported vehicles on the other hand.

Despite flagging domestic sales of the Commodore in 2012, production at the Elizabeth plant the year before reached 90,424 units, a 36.8 per cent gain on the figure of 66,061 in 2010. Domestic sales in 2011 were also lower than for the previous year, the total of 126,095 representing a 5.1 per cent drop. Exports rose in 2011 however, also contributing to the factory's output. 12,068 cars were shipped from Elizabeth to points overseas.

Placing government co-investment in context, Holden revealed that the company spent $231 million last year, focused on "advanced manufacturing, design and engineering in Australia". In 2010 Holden invested $179 million and the company's total funding for R&D has reached $1.3 billion over the last five years.

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