Holden posts second consecutive annual profit

Holden has finished in the black for the second consecutive year, announcing today that it posted an after-tax net profit of $152.8 million for the 2016 calendar year.

As the Lion brand approaches its manufacturing shutdown on October 20, moving to an import-only basis thereafter, annual results reveal that its national sales business finished with an after-tax profit of $27.3 million and its manufacturing business finished with an after-tax profit of $125.5 million.

The result comes after Holden received $51.4 million from the tax payer-funded Automotive Transformation Scheme (ATS) in 2016. Final recorded figures also include a $128.1 million payment from General Motors to “assist with the orderly wind-down” of Holden’s manufacturing operations.

Without these elements, insiders say the manufacturing result actually finished closer to a $180 million loss.

While the 2016 result looks neat on the surface, it comes amid a serious transformation for Holden as it transitions from manufacturer to national sales company. The company suffered losses of $152.8 million in 2013, $553.8 million in 2014 and $255.2 million in 2015.

Had Holden continued manufacturing beyond its 2017 closure, a projected additional $125.6 million would have been accrued in depreciation costs, the company said.

Looking ahead, Holden is now intent on growing its national sales operation and improving its position in the market. Currently, it is enduring mixed results.

“We’re facing challenges as a business and undergoing fundamental changes, there is no sugar coating that. But our consistent financial results highlight the underlying health of the business,” Holden boss Mark Bernhard said.

“Now we need to keep our unwavering focus on growing sales, re-building our brand and putting our customers first. If we look after the fundamentals of our business, the rest will take care of itself.”

The company said its recent $130 million sale of the Port Melbourne engine assembly plant premises will be included in its 2017 annual report.

In the final year of operation, the Port Melbourne factory produced 52,234 engines for Holden, and the company produced 38,677 vehicles overall.

Exports for 2016 totalled 4191, sent between New Zealand, the Middle East and North America.

Holden said it invested $69.1 million in R&D in 2016.