Thursday, 22 February 2018 | MYT 8:22 PM
Sime Darby posts core profit of RM525m in H1
KUALA LUMPUR: Sime Darby Bhd posted a set of firm financial results in the first half ended Dec 31, 2017 with core profit before interest and tax (PBIT) of RM525mil, underpinned by the pick up in Australia's mining business.
Also supporting the better results were the increased automotive and equipment sales in China. It reported PBIT of RM495mil and net profit of RM320mil.
Its group chief executive officer Jeffri Salim Davidson said on Thursday the operational results for the first half had been very encouraging.
“Following the listing of the plantation and property pure plays, Sime Darby Bhd is now focused on our core trading businesses in the motor distribution and industrial equipment sectors across the Asia Pacific region.
“These two divisions are already leading regional players in their respective businesses, and we are working to cement our leading position in existing markets while expanding our footprint into new markets. We will continue to focus on operational efficiency and cost optimisation moving forward,” he said.
He said there were some one-off adjustments which affected the 1H FY2018 results arising from its decision to exit the BMW operations in Vietnam.
“There is also the adjustment as a result of the de-consolidation of Yayasan Sime Darby following the pure-play exercise. But these were off-set by a gain from the sale of property in Australia,” he added.
Sime Darby posted revenue of RM16.96mil in the first half, up 12.9% from the RM15.02mil a year ago. PBIT was up 2.5% to RM495mil from RM483mil while profit before tax fell 14.2% to RM514mil from RM599mil.
Profit from continuing operations fell RM24.2% to RM360mil from RM475mil. Profit from discontinued operations were RM1.378bil compared with RM813mil. This saw profit for the period advanced 34.9% to RM1.738mil from RM1.175bil.
The industrial division reported a PBIT of RM393mil versus RM106mil a year ago, mainy due to higher equipment deliveries and product support sales in Australia.
He was upbeat about the recovery of the mining sector in Australia and “we are seeing significantly increased activity in our workshops as customers ramp up production”.
Commenting on the equipment sales in China, he said the higher PBIT for 1H FY2018 was supported by China's continuing infrastructure spend.
“The reported PBIT for 1H FY2018 also includes a RM165mil gain on disposal of properties in Australia and Malaysia,” he added.
Sime Darby's motors division reported a PBIT of RM135mil, down 49.2% from RM266mil a year ago was largely due to the costs of its exit from the BMW business in Vietnam amounting to RM184mil.
However, the division’s core PBIT improved by 19% to RM269mil as its China operations delivered nearly half of the profit at RM118mil. Jeffri said it benefited from the higher margins and strong performance of the BMW operations.
As for the logistics division, PBIT jumped 87% to RM43mil from RM23mil mainly due to the higher throughput at Weifang Sime Darby Port.
On its Malaysian hospitals, its 50:50 joint-venture, Ramsay Sime Darby Healthcare, reported a half-year PBIT of RM25mil compared with RM19mil last year.
Q2 ended Dec 31, 2017
Sime Darby posted net profit of RM72mil in the second quarter ended Dec 31, 2017, excluding the discontinued operations.
Its revenue rose 9% to RM8.81bil from the restated RM8.08bil a year ago. Its PBIT was RM139mil, down 36.8% from the RM220mil a year ago.
Profit from discontinued operations fell 51.5% to RM259mil from RM494mil. This saw its profit for the period fall 51.5% to RM344mil from RM709mil a year ago.
Earnings per share were 4.5 sen and it declared an interim dividend of two sen a share.