Holden blames local manufacturing for $152m loss

Holden has posted its second-biggest financial loss ever, with the high dollar and restructuring costs hurting the bottom line.

The key manufacturer posted a net loss of $152.8 million for the 2012 financial year after recording a $89.69m result a year earlier.


Revenue also fell from $4.3 billion to $4bn and a $226m one-off charge associated with the company restructuring its business also weighed on its performance.


In announcing the loss Holden CEO George Kapitelli said the loss was primarily a result of making cars in Australia.


What the headline numbers today don't show is the difference between General Motors profitability versus Holden profitability. Holden's imported portfolio is profitable. The losses we have talked about today are a direct result of Holden building cars in Australia,” he said.


Kapitelli said the strong dollar helped improve margins on imported cars, but the gains were not enough to make up for the losses recorded by local manufacturing.


"Australia is one of the most open and trade-exposed automotive markets anywhere in the world with more than 180 passenger cars to choose from," he said.


"With the Australian dollar at levels not seen since the early 1980s, this puts particular pressure on our Australian manufacturing operations.


"While we benefit from the strength of the currency with our imported models, we are the most trade-exposed of the local manufacturers, with 60 per cent of our sales from the locally produced Commodore and Cruze."


Despite the loss Holden said it was well positioned for “future profitability” and it had a strong balance sheet with zero debt.


The company also said it was still focused on operating in Australia, and a rise in spending on plant and equipment last year proved its commitment.


Devereux said Holden had restructured its business to help cope with difficult conditions, and the locally made Cruze and VF Commodore, along with the imported Malibu and Trax models, would support its performance in the second half.

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