This article first appeared in The Edge Financial Daily, on June 1, 2016.

KUALA LUMPUR: Proton Holdings Bhd has dragged DRB-Hicom Bhd into deeper quarterly losses of RM790.76 million in the fourth quarter ended March 31, 2016 (4QFY16) — its second consecutive quarter in the red.

In the preceding quarter ended Dec 31, 2015, it recorded a net loss of RM185.32 million on RM3.33 billion in revenue.

Its revenue slid to RM2.63 billion from RM3.21 billion in the previous corresponding period .

DRB-Hicom said Proton suffered from lower sales amid the stiff competition that resulted in heavy year-end discounting and sales promotions, volatility in foreign exchange rates and weak consumer sentiment.

The weak foreign exchange affected Proton’s raw material costs. The carmaker also saw a lack of new models during the financial period and reduced profit margins.

“In addition, Proton made provisions relating to certain non-recurring charges which had affected its bottom line,” read the group’s statement yesterday.

The group also incurred an impairment loss of about RM195.8 million, including impairment on other receivables amounting to RM129.34 million.

The weaker financials notwithstanding, the group declared a first and final dividend of two sen for FY16, compared with FY15’s total six sen dividend.

For its full financial year ended March 31, 2016 (FY16) DRB-Hicom posted a net loss of RM991.9 million, compared to a net profit of RM300.19 million a year ago. Annual revenue dropped 11% to RM12.17 billion, from RM13.69 billion in FY15.

Among the businesses within the group which recorded healthy growth are Alam Flora Sdn Bhd’s solid waste management, which saw growing coverage from increasing demand for its public cleansing services; Honda Malaysia Sdn Bhd, which posted record-breaking sales.

Another subsidiary, Composites Technology Research Malaysia also saw improvements in its overall business with RM12 billion to its order book. New contracts signed or extended during the financial period included those with MD Helicopters US, Spirit AeroSystems Inc and UTC Aerospace Systems.

On its prospects, DRB-Hicom said in view of the volatility in the domestic and global economic environment, the domestic automotive and property sectors will continue to be challenging as consumer confidence remains weak.

“Among the key initiatives for the current financial year is to turn around Proton. The turnaround plan which is in place with the support of the government through the RM1.5 billion financial assistance is expected to improve the financial performance of Proton,” said DRB-Hicom.