Holden posts $128.2 million 2015 profit despite sales hitting a 22-year low

HOLDEN has posted an after-tax profit of $128.2 million in 2015 even though its sales hit a 22-year low — proving there is more money in selling imported cars than making them locally.

Imported cars have driven a turnaround in profits for Holden - along with government handouts.

HOLDEN has posted an after-tax profit of $128.2 million in 2015 even though its sales hit a 22-year low — proving there is more money in selling imported cars than making them locally.

Demand for imported cars overtook Australian-made Holdens for the first time since the company was founded in 1948 — as it prepares to shut its Port Melbourne engine plant later this year and shutter the car assembly line in Elizabeth, South Australia in late 2017.

Holden’s first profit since 2011 comes after it lost more than $1.54 billion over the previous 10 years — despite receiving $2.3 billion in state and federal government assistance over that period.

Its return to profitability can be attributed in part to government funding; Holden still received $70.3 million in taxpayer dollars in 2015, to go towards the continuation of locally-made cars until the end of 2017.

Holden’s financial turnaround occurred despite posting the lowest revenue in at least two decades.

Holden’s total revenue of $3.59 billion for 2015 was down from $3.62 billion in 2014 and $4.05 billion in 2013.

Holden‘s Chairman and Managing Director, Mark Bernhard.

Holden boss Mark Bernhard — the first Australian to run Holden in 25 years — said the 2015 financial results proved the company is “consistently profitable” on the sale of imported vehicles.

“Put simply, Holden is profitable on our imported vehicle range, while our manufacturing business continued to run at a loss in 2015,” said Mr Bernhard.

Holden said the bulk of redundancies and wind-down costs associated with closing its factories have now been accounted for.

“The bottom line is that Holden is profitable as a fully-fledged importer of vehicles and we have a very bright future,” said Mr Bernhard.

Holden’s manufacturing division continues to face “insurmountable economic challenges” such as “a high cost-base, insufficient economies of scale, fluctuating Australian dollar, (and) a fragmented and ultra-competitive market”.

“None of these factors have changed and building cars in this country remains unsustainable,” said Mr Bernhard.

Of the 2400 people employed at Holden there are currently 1100 on the production line in Elizabeth and 250 at the engine factory in Port Melbourne.

“Our manufacturing colleagues should be highly commended,” said Mr Bernard.

“Right now, the men and women at our Adelaide factory are building the best quality cars they have ever built and have been recognised globally by General Motors.”

This reporter is on Twitter: @JoshuaDowling