KUALA LUMPUR: Automotive components manufacturer Ingress Corporation Bhd is negotiating with its clients to share some of its tooling cost to ease its cash flow, which went into negative territory in its third quarter of FY2009.

For its first quarter FY2010 ended April 30,2009 , Ingress' cash and cash equivalents stood at negative RM5.11 million.

"We are negotiating with Proton (Proton Holdings Bhd) and Perodua (Perusahaan Otomobil Kedua Sdn Bhd) to bear some tooling costs that we have paid. We have paid more than RM20 million for the Perodua model and about RM8 million to RM9 million for the Proton one.

"Hopefully can get back what we have paid for," executive vice-chairman and chief executive Datum Rameli Musa said after its AGM yesterday.

He said that the company had already agreed to do the seven-seater models for Proton and Perodua before the subprime crisis hit the market and was committed to delivering them on time.

"Proton and Perodua have also helped with buying the materials ahead for us to ease the burden on our cash flow," he said.

Net profit for the period plunged 84% year-on-year to RM871, 000. Revenue, however; rose to RM15l.68 million from RM111.91 million previously, due to production of Proton's Exora.

Rameli said since September last year, its automotive division was operating below breakeven level as the uptake of its products was below expectation except for Perodua's Myvi in Malaysia and Honda in Thailand.

He added that for the first five months of 2009, total industry volume (TIV) declined 45% in Thailand, 40% in Indonesia and more than 20% in Malaysia.

"But from. the trends, we have observed that it has reached the bottom for this line of business in Malaysia and Thailand around June to July.

"If this trend continues; the second half would be much better for us and with the cost-cutting measures we have taken in the last one year, we will remain profitable this year," Rameli said.

For the financial year ended Jan. 31, 2009, the company posted a net. loss of RM43.23 million on the back of RM569.55 million in revenue. The company suffered losses for the past three years despite continued growth in revenue.

Rameli said that its losses in FY09 were due to a one-off depreciation charge of RM45.6 million in compliance with the Financial Reporting Standards 116.

Going forward, Rameli said Ingress had forecast a full-year TIV decline of 29% for Thailand, 30% for Indonesia and 10% for Malaysia, signifying a more optimistic outlook for the automotive industry in the second half of this year.

On its RM160 million sukuk, he said it was too early to comment on its restructuring plan as it was still under evaluation.

Ingress has received a six-month extension to repay the first tranche of its sukuk amounting to RM50 million which was due on July 9, and has six weeks from then to propose a restructuring plan.

Meanwhile, Ingress' power engineering division has also submitted bids for some RM800 million worth of Tenaga Nasional Bhd projects. The division has RM1180million Tenaga projects in hand to last the next two years.