Friday, May 27, 2011

#Update* Sime Darby chalks up RM820m net profit in 3Q

KUALA LUMPUR: SIME DARBY BHD [] posted net profit of RM820.12 million in the third quarter ended March 31, 2011 compared with net loss of RM308.63 million a year ago.

The conglomerate announced on Friday, May 27 that revenue increased by 39.8% to RM10.59 billion compared with RM7.57 billion. Earnings per share were 13.66 sen versus loss per share of 5.14 sen.

For the nine-month period, its net profit jumped 192% to RM2.35 billion compared with RM804.20 million a year ago, due to higher contributions from the PLANTATION [], motors, industrial and energy and utilities divisions.

The pre-tax profit increased by more than two fold, to RM3.448 billion against RM1.716 billion. Revenue increased by 24.9% to RM29.66 million compared with RM23.74 billion.

Sime Darby's president and group chief executive, Datuk Mohd Bakke Salleh said: 'This marked improvement in performance was achieved despite difficult operating conditions, a testament to the perseverance, commitment and hard work of our employees.'

'We will ensure that Sime Darby will have a strong portfolio of winning businesses,' he said.

Mohd Bakke added the group had completed a review of its portfolio of businesses and was currently finalising its five-year strategic blueprint.

This also saw its unit Sime Darby Engineering Sdn Bhd selling its two fabrication yards for a total of RM695 million, which was above the RM641 million book value of the assets as at 31 March 2011.

Elaborating on the nine-months results, Sime Darby said the the plantation division recorded an 18% increase in operating profit of RM2.0 billion from RM1.705 billion a year ago despite lower fresh fruit bunches (FFB) production and yields caused by prolonged rainfall and changing crop patterns.

The higher operating profit was due to higher average crude palm oil price of RM2,828 a tonne compared with RM2,277 a year ago.

Its industrial division reported an operating profit of RM699 million, which was 30% higher than thwe RM536.7 million, mainly due to'' strong sales in Australia/Pacific Islands and Malaysia, as well as better price realisation across all regions.

Its motors division continued its excellent performance into the third quarter, with operating profit up 90% to RM441 million from RM232.6 million mainly due to the robust demand across all regions, particularly for new models introduced by BMW, Hyundai and Ford.

However, its property division reported a 44% decline to an operating profit of RM210 million from RM374.8 million mainly due to delayed launches of major projects and cost incurred on a development project in the current period which was written off.

Its energy & utilities division posted operating profit of RM220 million versus operating loss of RM1.019 billion a year ago.

Sime Darby said the performance for the current period was mainly due to the write back of RM98.5 million of provision following the signing of the close-out Agreement with Maersk Oil Qatar.

'Earnings from the power sector has remained consistent whilst better returns were reported from the port operations in China. The results of the previous year included a loss of about RM1.3 billion in four projects in the oil & gas sector,' it said.

It cash and cash equivalents as at March 31, 2011 declined to RM4.122 billion from RM4.968 billion as at March 31, 2010.

On the outlook for the remaining period of the current financial year ending June 30, 2011, it said the plantation division was expected to record higher earnings as CPO prices have continued to remain favourable and FFB production has improved as compared to that in January and February 2011.

'Despite the severe Queensland floods during December 2010 to January 2011, the Industrial division is expected to achieve improved results as operations in Australia have recovered swiftly and have been further boosted by the continued strong demand in China and Malaysia. The motors division's performance is expected to continue to benefit from the robust growth in all regions of its operations,' it added.

Sime Darby was positive about its property division, and expected the results to improve in the last quarter due to the new launches in the various townships.

'In the energy & utilities division, the oil & gas sector continued to remain challenging whilst the power and port sectors will continue to generate positive contribution,' it said.

On the healthcare division, it expected it to maintain its steady performance.

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