Sime Darby Bhd group chief financial officer Datuk Tong Poh Keow(left) at the briefing yesterday.

KUALA LUMPUR: The sterling set of results by Sime Darby Bhd in the first quarter ended Sept 30 will be the last for the conglomerate as a group.

Increased production from its oil palm estates, coupled with higher selling crude palm oil (CPO) prices, boosted net profit by 152% to RM1.32bil compared with RM522mil a year ago.

The property and plantation businesses, which will be housed under separate listed companies from December onwards, made RM1.07bil for the group, while the remaining RM248mil was from its continuing operations that include industrial, motors, logistics and others.

“Due to this pure play exercise that we are currently targeting for completion by the end of this month, the company’s targets for the year – such as the net profit target – will be reviewed by the new board members when they come on board,” group chief financial officer Datuk Tong Poh Keow said at the results briefing.

“The new board members of Sime Darby will be reviewing these numbers and we shall announce these updates in due course,” Tong said.

The year got off to a strong start for Sime Darby.

Its motor division sold 20,308 units in the first quarter of financial year 2018 (FY18), driven by the higher number of units sold in Singapore, Thailand, Malaysia, Hong Kong and Taiwan.

Generally, the group’s industrial division is improving, with an orderbook year-on-year growth of 64% to RM2.38bil as at Sept 30.

Australasia, which is Sime Darby’s largest industrial market, is showing an upswing in demand for coal and other minerals.

Hence, there is increased demand for mining and construction equipment and parts as fleets are put back to work.

“An upcoming big fleet of equipment will be required to support Adani’s Carmichael Mine operations, which is expected to commence in 2018,” said Tong.

As for Malaysia, the industrial scene is supported by mega-infrastructure projects.

Sime Darby is working on securing more orders from infrastructure projects in Sabah and Sarawak and the company has received new orders from the forestry segment.

Meanwhile, Sime Darby Property will launch two phases of double-storey link houses – Ferrea in Denai Alam and A2 in Serenia City – in FY18.

Apart from that, Sime Darby Plantation will embark on strategic initiatives in areas such as water management, mechanisation as well as managing cost and improving margins in the downstream segment.

It will also enhance the oil extraction rate and mill efficiency, as well as accelerate replanting with superior high-yielding material that will accelerate replanting at 5% to 7%.

Sime Darby Plantation CEO Datuk Franki Anthony Dass said the company is targeting to increase its fresh fruit bunch (FFB) production by 6% to 7% in FY18.

In the first quarter ended Sept 30, Sime Darby Plantation’s FFB production increased 25% to 2.696 million tonnes, and the average CPO price realised was 4% higher at RM2,693 per tonne as compared to the previous corresponding quarter.

Dass expects the CPO price to be sustained at about RM2,600 to RM2,700 per tonne for the rest of the year. “Anything (price) beyond December is anybody’s guess,” he said.