Proton Holdings Bhd's pre-tax profit for the first quarter ended June 30, 2011 dropped to RM12.107 million from RM104.649 million in the same quarter of 2010.
Its revenue fell to RM2.233 billion from RM2.290 billion previously, it said in a statement today.
Proton said the decline in profit was largely attributable to higher expenses incurred by Lotus Group International Ltd (LGIL) in the rebuilding of its brand and restructuring costs.
"LGIL is on target with its business plan and achievements to date are in line with the company's five-year business transformation exercise," it said.
It said the higher spending at LGIL, however, was partially offset by higher revenue from an increase in Proton's domestic sales volume, which was approximately three per cent higher in the first quarter as compared with the corresponding period last year.
Group chairman, Datuk Seri Mohd Nadzmi Mohd Salleh, said Proton was aggressively spearheading the transformation of LGIL.
"The latest development has been the signing of a new distributorship agreement in China which is also one of the fastest-growing premium sports car markets in the world.
"The appointed dealer, Lotus China Symphony Ltd, will invest in new dealerships throughout the country to offer a full range of high performance Lotus cars to the Chinese market," he said.
LGIL has also recently appointed new distributors in Australia and New Zealand, he said.
Mohd Nadzmi said the group was encouraged by positive developments in large markets such as India and China.
"These factors, together with our efforts to tap into various other new and emerging markets, will spearhead Proton's global exercise," he said.
He said Proton would continue to invest in the development of new technologies and improve its operational efficiencies while at the same time, remaining cautious of the unpredictability in the global markets.
On the domestic front, he said, although the economic outlook was expected to grow at a slower pace, the group was cautiously optimistic of its sales target for the rest of the financial year.
Group managing director, Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir, said Proton would intensify its sales and marketing activities for the current product offerings, to increase sales volume, as well as to increase its income from after-sales-related products and services.