National carmaker Proton said its full year net profit slumped 54 percent due to poor sales but predicted a recovery this year, citing the launch of new models and improved demand.

Proton's net profit for the year to March dropped to RM510.07 million from RM1.11 billion the previous year, and sales felling by 30 percent to RM6.47 billion.

Its earnings per share dipped to RM0.929, from RM2.019 previously. There is no dividend payout for the 2003 financial year, the national carmaker said in a statement.

Analysts said Proton's earnings were above market consensus forecast of RM415 million, mainly due to better fourth-quarter results.

Proton said it turned around with a pre-tax profit of RM227.50 million in the final quarter, compared with a loss of RM51.5 million in the December quarter, due to a seven percent rise in revenue and lower research and development costs.

For the full year, it said the contribution from its subsidiary, distributor Proton Edar, was lower compared with the previous year mainly due to higher incentives given to boost sales and lower sales of optional accessories.

New models

Its British unit, Lotus Group, also booked a small profit for the full year.

"Demand in the domestic market has started to increase based on orders received from our distributor," it said, adding the higher demand and the launch of new models this year were expected to boost its performance this year.

Proton used to sell six out of 10 new cars in the country but for the first time in years, its market share shrank to 49 percent in 2003, from 60 percent in 2002, as sales tumbled to 155,420 units.

Proton has been protected for years by high tariffs on foreign cars but it will lose its edge under the Association of Southeast Asian Nations Free Trade Area, where import tariffs for most products in the region were cut to below five percent from last year.

Malaysia obtained a two-year reprieve for its auto sector until 2005 but it has said it would further defer reducing duties to the required level until - AFP