BY JOSEPH CHIN
Sime Darby president and group chief executive, Tan Sri Mohd Bakke Salleh said the group’s year-to-date results for FY2017 have largely been supported by higher crude palm oil (CPO) prices.
KUALA LUMPUR: Sime Darby posted earnings of RM699mil in the third quarter ended March 31, 2017, which was capped by higher tax and perpetual sukuk expenses.
The conglomerate said on Wednesday the earnings were up 5.4% from the RM663mil a year ago. Its pre-tax profit was RM1bil, up 27.3% from RM791 a year ago.
Its pre-tax profit was boosted by improved contributions from the plantation, industrial and motors divisions.
Sime Darby's revenue rose 21.6% to RM12.44bil from RM10.23bil. Earnings per share were 10.3 sen versus 10.5 sen.
For the nine months ended March 31, 2017, its earnings jumped 40% to RM1.78bil from RM1.27bil in the previous corresponding period.
Its pre-tax profit jumped 48.1% to RM2.557bil from RM1.727bil. Its revenue increased by 8.2% to RM34.88bil from RM32.23bil.
Sime Darby president and group chief executive, Tan Sri Mohd Bakke Salleh said the group’s year-to-date results for FY2017 have largely been supported by higher crude palm oil (CPO) prices.
CPO prices averaged at RM2,861 a tonne in the first nine months compared to RM2,113 in the same period last year.
“Stabilising coal prices as well as increased activity in the construction sector in China and Malaysia served as catalysts for the industrial division.
“Despite tightening regulations and rising import costs, we are encouraged by the motors division’s performance, driven by higher demand in key markets.”
On the company’s listing plans for its Plantation and Property divisions, Mohd Bakke said: “The listing of pure plays is on-track.
“The group recently received approval from our bondholders to restructure the US$800mil sukuk and Sime Darby Plantation achieved first-time corporate ratings of Baa1 and BBB+ by Moody's and Fitch Ratings respectively, both on stable outlook,” he said.
On the third quarter financial performance, Sime Darby said the plantation division registered a profit before interest and tax (PBIT) of RM732mil for 3Q FY2017 compared to RM92mil in 3Q FY2016.
“The eight-fold increase in PBIT for the current period was a result of plantation’s continued efforts to drive various initiatives to manage cost and improve its productivity.
“This achievement was further enhanced by average CPO selling price realised which was 40% higher on-year at RM3,088 a tonne for the current quarter versus RM2,200 in the previous corresponding quarter,” it said.
The property division reported a PBIT of RM67mil compared to RM584mil a year ago. The 89% on-year fall was mainly due to the gain on disposal of Sime Darby Property (Dunearn) Pte Ltd and Sime Darby Property (Kilang) Pte Ltd of RM406mil in Q3 of FY16.
However, in Q3 FY17, the gain on disposal of 403 acres of land in Glengowrie Estate of RM202mil was partially offset by the provision made on unsold stocks.
Sime Darby said it also incurred costs to terminate the proposed acquisition of Japan Residential Assets Manager Limited (JRAM) and new units in Saizen Real Estate Investment Trust (Saizen REIT).
As for the industrial division’s PBIT for the period under review improved by 8 percent to RM82mil from RM76mil in 3Q FY2016, mainly due to higher contributions from Australasia, China/Hong Kong (HK) and Malaysia.
As for the motors division, it achieved a PBIT of RM126mil versus RM74mil a year ago. The 70% increase in PBIT was due to higher profits from China/HK and Australia/New Zealand (NZ) by 160% and 42% respectively.
“The improved earnings in Malaysia were driven by improved contribution from the mass-vehicle segment due to new model launches.
“The division’s operations in South East Asia excluding Malaysia recorded a YoY decline in PBIT of 39% for the quarter under review.
"This was principally due to prevailing market challenges and also lower margins experienced in regions such as Singapore,” it said.
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