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Thursday, March 1, 2012

Sime Darby net profit jumps to RM1b in Q2

Revenue surged to RM11.3 billion from RM9.9 billion in the comparable period before riding on good yield of its palm oil trees, higher automotive sales and booming property sales.

KUALA LUMPUR:SIME Darby Bhd made a net profit of RM1.1 billion in the second quarter ended December, a 25.5 per cent increase compared with RM877.0 million in the comparable quarter a year ago.

But the country's oldest conglomerate warned of challenging times in the remaining six months of the year.

The diversified group saw good performance in all of its six business divisions spearheaded by strong crude palm oil (CPO) prices, encouraging property and automotive sales as well as good sales at its industrial and healthcare divisions.

Sime Darby's six business divisions are plantations, property, energy, automotive, healthcare and industrial and others.

Sime Darby president and group chief executive officer Datuk Mohd Bakke Salleh said the group had a commendable first half with all six divisions achieving double-digit earnings growth due to its continuous emphasis on enhancing earnings quality.

"But the third quarter is usually challenging due to the shorter month of February, lower yield of fresh fruit bunches and the unpredictable external environment such as the debt problem in Europe.

"We are bracing ourselves for lower contributions and not overly optimistic but hope things will fan out nicely over the next few months," Mohd Bakke told reporters here yesterday after unveiling the group's second quarter results.

However, he is confident that the group will be able to hit a pre-tax profit of RM3.3 billion, one of its 2012 key performance indicators.

In the first six months of the year, higher realised CPO prices and operational efficiency improvements boosted the plantation division's operating profit by 38 per cent to RM1.8 billion.

The industrial unit continued to thrive on the back of robust activity in mining, logging and construction sectors in Australia and Malaysia to post an operating profit of RM628 million, a rise of 38 per cent.

The property division showed a significant increase of 46 per cent in its operating profit to RM193 million in the first half of this year compared to the same half last year.

Meanwhile, the energy and utilities division operating profit grew by 127 per cent in the first half of the year under review due to the recognition of deferred revenue of RM99 million from the local power plant.

The healthcare division posted a higher operating profit of RM14 million, a 7 per cent rise compared with the same period a year ago underpinned by the higher inpatient and outpatient visits offsetting the higher costs incurred by Sime Darby Medical Centre Ara Damansara, which had a soft launch in January this year.

By Business Times

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