Ford Australia Reports 2005 Profit

[RPO83]

Ford Motor Company of Australia Limited* today reported a net profit after tax of $148.2 million for calendar year 2005.

Calculated according to the new Australian International Financial Reporting Standards (AIFRS) introduced in 2005, the profit is a 23 per cent decline versus the prior year. The company's previously reported 2004 calendar year profit of $185.6 million was also recalculated under AIFRS and is now recorded at $192.3 million.

Net sales revenue for 2005 was $3.9 billion and resulted from sales of 129,140 vehicles.

"Our financial position in Australia for the 2005 calendar year remained strong," said Ford Australia President, Mr Tom Gorman.

"However, the reduction in our profit and sales revenue versus the prior year is a reflection of the market forces that became prevalent in the Australian automotive sector during the second half of 2005.

"Rising petrol prices have had a significant impact on sales of large cars and SUVs in Australia. Although this has had a flow-on effect on overall sales of our Falcon and Territory model lines, we maintained strong market share of each category during 2005."

Ford sold 53,080 Falcon vehicles during 2005, for a 33 per cent share of the large car market. Territory remained Australia's top-selling SUV, with 23,454 vehicles sold during the year, which also gave the company a 33 per cent share of the medium SUV segment.

Overall market share was 12.7 per cent, down from 14.2 per cent in 2004.

"We sold more locally manufactured vehicles in Australia during 2005 than any of our competitors, placing us in a unique position to build on this strong market presence," said Mr Gorman.

"The introduction of the BF Falcon and SY Territory in October 2005 allowed us to maintain our competitiveness and introduced a number of class-leading technologies, including the first six-speed automatic transmission on an Australian vehicle, to our locally produced range.

"Actions underway in 2006 will further improve the attractiveness of these model lines and introduce new customers to the Ford brand."

Other vehicles launched during 2005 included the all-new Ford Focus, which went on sale as small cars began to dominate the Australian automotive landscape.

"Initial availability concerns with Focus were resolved early in 2006 and we are continuing to build momentum with sales of our imported small and light vehicles," said Mr Gorman.

"The first half of 2006 has been challenging, with external market forces continuing to have an adverse impact on vehicle sales. However, Ford Australia has been very proactive in determining future product development and investment strategies which will position us well for the future.

"The announcement of the company's involvement in the development of a new global light commercial vehicle architecture program is proof of the engineering and design capability we have here at Ford Australia and we look forward to building on those and other export opportunities in the years to come."

[vztrt]

Ford did well in early 05 but was stuffed in the second half of the year. 06 will be interesting to see if they can stay in the black.

[Smoked]

Such a small profit when you think about the R&D $$$ spent. The BA was $500 million wasnt it.

[Smoke Pursuit]

Gotta remember tho before that profit they would have being paying out finance to cover those R&D costs, so thats profit after interest etc.

[slloyd]

Originally Posted by LSTerritoryGhia

Gotta remember tho before that profit they would have being paying out finance to cover those R&D costs, so thats profit after interest etc.

Of course. That's generally what profit is.

[AUIII XR8 MAN]

Well it good to see Ford Australia pulling it own weight.

[MX837M-GE]

IMHO, these figures mean precisely nothing. Transfer pricing by multinationals mean we'll never truly understand how the locals perform. If so, we'd "know" that Toyota has only made about $50m in Australia in 10 years.

By sending money to overseas divisions etc, firms like Ford can send profits to more 'tax effective' locations. Ever seen the invoice price lists for imported cars and/or car parts? ;) Admittadly, I've only seen them for Mercedes-Benz, but I'm 100% sure they all play the same game.

Gorman's comments sounded entirely plausable though, and the overrall figures probably give a fair indication of trends, if not actual numbers etc. Besides, coming from a finance background, would be interesting to see the cashflow figures.

[Falcon Freak]

Don't forget that the Australian government provides ACIS to the local automotive industry. If you deduct the government subsidy then the profit figure is not very good.

FF

[xfalconz]

The fact Ford made a profit has got to mean something positive. After the AU Falcon then the cost of development for the BA.
I wonder how much of incoming revenue for Ford Australia is dependent on Falcon sales, and how much a slowing of large car sales will affect this.

[MX837M-GE]

Originally Posted by Falcon Freak

Don't forget that the Australian government provides ACIS to the local automotive industry. If you deduct the government subsidy then the profit figure is not very good.

FF

Hmm But what does the profit figure mean? Do you think it is an accurate reflection of the Ford Australia's performance - its ability to pay dividends to its parent Ford USA or anything like that?

[Dr Smith]

Would be interseting to see how much profit came from selling cars versus profit from the design work for the Indian Fiesta for example?

[JPFS1]

Originally Posted by MX837M-GE

IMHO, these figures mean precisely nothing. Transfer pricing by multinationals mean we'll never truly understand how the locals perform. If so, we'd "know" that Toyota has only made about $50m in Australia in 10 years.

By sending money to overseas divisions etc, firms like Ford can send profits to more 'tax effective' locations. Ever seen the invoice price lists for imported cars and/or car parts? ;) Admittadly, I've only seen them for Mercedes-Benz, but I'm 100% sure they all play the same game.

Gorman's comments sounded entirely plausable though, and the overrall figures probably give a fair indication of trends, if not actual numbers etc. Besides, coming from a finance background, would be interesting to see the cashflow figures.

spot on.

[Tles]

With sales of Territory running at around 50% Ghia and 40% private purchase it must be the most profitable line. Compare this to around 4% Ghia and 88% fleet for the Falcon/Fairmont. With more Focus stock and sales and similar for Fiesta, though exit F250, hopefully Ford Oz profitability will remain strong and improve. The local arm will need to be more and more self reliant and provide it's own development funds in the future, not hand out to head office.
The Falcons appeal to private purchasers must be improved dramatically for both profit and resale value purposes.
- V8 Supercars and FPV help sell Falcons and the Ford brand as does the XR8 and GT
- XR6, 6T, F6 also help as halo and cult cars as do XR5 Turbo and Territory Turbo
It's vehicles like these that Kids and their Parents should have as Aspirational Vehicles
Forums like this and members showin' off their pride n' joy help heaps too.

Originally Posted by Caseterritory

- V8 Supercars and FPV help sell Falcons and the Ford brand as does the XR8 and GT
- XR6, 6T, F6 also help as halo and cult cars as do XR5 Turbo and Territory Turbo
It's vehicles like these that Kids and their Parents should have as Aspirational Vehicles
Forums like this and members showin' off their pride n' joy help heaps too.

Unfortunately Ford missed a golden opportunity with the BA-BF with the V8. Instead of hitting Holden where it hurts, Ford continuesly pussyfoots around with the V8 and continues to struggle to attract buyers of XR8. And again, unfortunately, considering fuel prices this opportunity may not come again.

Territory would be a big reason why profit is where it is.

[red_hotxr6]

Hey at least they are making money.

[Bossxr8]

Originally Posted by red_hotxr6

Hey at least they are making money.

They won't in 2006 though. Tough times ahead.

[McobraR]

2005 CALENDER year? why did it take 9 months to announce it?
I reckon Ford will have made some profit for the 2006 calender year, since the VE was only released a few weeks ago. My guess, about 100mil. profit

[Smoked]

Originally Posted by Bossxr8

They won't in 2006 though. Tough times ahead.

What is your basis for that comment?

Sales of the Territory have continued to soar, Falcon hasnt declined greatly, but it has dropped. I think the will record another profit, but not as great.

[Walkinshaw]

Originally Posted by RATT

Unfortunately Ford missed a golden opportunity with the BA-BF with the V8. Instead of hitting Holden where it hurts, Ford continuesly pussyfoots around with the V8 and continues to struggle to attract buyers of XR8. And again, unfortunately, considering fuel prices this opportunity may not come again.

Amen.

Ford = skirts

[Bossxr8]

Originally Posted by Smoked

What is your basis for that comment?

Sales of the Territory have continued to soar, Falcon hasnt declined greatly, but it has dropped. I think the will record another profit, but not as great.

Territory and Falcon sales have dropped over 20% and there are heaps of unsold cars sitting around. They will be very lucky if they make a profit this year. They would be predicting a loss.

[vztrt]

Originally Posted by Smoked

What is your basis for that comment?

Sales of the Territory have continued to soar, Falcon hasnt declined greatly, but it has dropped. I think the will record another profit, but not as great.

He is actually on the money. It's been a tuff year for FOA.......well a tuff year for Ford in general.

[Smoke Pursuit]

Originally Posted by Bossxr8

Territory and Falcon sales have dropped over 20% and there are heaps of unsold cars sitting around. They will be very lucky if they make a profit this year. They would be predicting a loss.

Yep, dealers still have BA Mark II stock, these cars would now be costing Ford money to sell. :ymca:

[SpoolMan]

Originally Posted by RATT

Unfortunately Ford missed a golden opportunity with the BA-BF with the V8. Instead of hitting Holden where it hurts, Ford continuesly pussyfoots around with the V8 and continues to struggle to attract buyers of XR8. And again, unfortunately, considering fuel prices this opportunity may not come again.

Correct Dean, few weeks back on Forum Raid we had lunch with Tom Gorman and another Ford executive I think he was head of engineering.
I asked why Ford dont advertise the fact that FPV out sold HSV for the 1st time ever over a financial year, I went to say people like winners the public jump on the back of a winner.
His reply was, no good crowing as you may not stay on top and that I was only looking at it from a enthusiusts view.
I looked at (John) outback Ute and said if you don't crow when you are on top, when do you crow?
Ford's marketing skills compared to there opposition is not aggressive enough.

[Stav]

Originally Posted by SpoolMan

Correct Dean, few weeks back on Forum Raid we had lunch with Tom Gorman and another Ford executive I think he was head of engineering.
I asked why Ford dont advertise the fact that FPV out sold HSV for the 1st time ever over a financial year, I went to say people like winners the public jump on the back of a winner.
His reply was, no good crowing as you may not stay on top and that I was only looking at it from a enthusiusts view.
I looked at (John) outback Ute and said if you don't crow when you are on top, when do you crow?
Ford's marketing skills compared to there opposition is not aggressive enough.

The time to yield your sword in victory is when your at the top!! Ford and holden both have tough times ahead. The fact that driving around all day down here there has been a massive backlash from both business and private users to get little fuel economic cars. The amount of honda accords out there has skyrocketted along with vw golfs/astras...

Its only smart business to pour resources into your best sellers which at the moment are small not large cars.

[uranium_death]

Calendar year...normally companies report profits/losses at the end of the financial year. That is rather interesting. Interesting indeed.

And especially since we are currently starting the 10th month of the year in 2006.

Ford need faster accountants. And better publicity agents too!

[vztrt]

Originally Posted by useless

Its only smart business to pour resources into your best sellers which at the moment are small not large cars.

Cars that bring little return back to ford.