Proton Holdings reported a 95% drop in net earnings to MYR4.5m in the first quarter of the current financial 2011, ending in June, compared with a MYR84.7m a year earlier.

The Malaysian automaker attributed the drop to significantly higher expenses association with restructuring and rebranding of its British sports car subsidiary Lotus Group International.

The drop in earnings was far worst than most analysts had expected and Proton’s shares were hit by a barrage of downgrades. “Lotus Group will continue to be a much larger drain on resources for the company than had been previously thought” said a local banking analyst.

Revenues dropped by 2.5% to MYR 2,233m with domestic sales up marginally year on year to 40,353 units.