Highlight Sime Darby 2Q profit rises 15.5% y-o-y on lower taxes; declares 6 sen dividend

by **Cals** Fri 28 Feb 2014, 14:27

Highlight Sime Darby 2Q profit rises 15.5% y-o-y on lower taxes; declares 6 sen dividend

Business & Markets 2014

Written by Ho Wah Foon of theedgemalaysia.com

Friday, 28 February 2014 13:30

KUALA LUMPUR (Feb 28): Sime Darby Bhd said it posted a net profit of RM818.3 million for the second quarter ended 31 December 2013 (2QFY2014), up 15.5% compared to the corresponding quarter of the previous financial year, due to reduced taxes.

This quarterly profit was achieved on reduced turnover of RM10.88 billion, versus RM11.25 billion a year ago, according to its filing with Bursa Malaysia.

For the half year ended December (1HFY2014), the group reported a net profit of RM1.3 billion, a decline of 23% year-on-year. Revenue totalled RM21.64 billion, compared to RM22.99 billion posted in the first half of the previous financial year.

The group announced an interim dividend of 6 sen per share for the financial year ending 30 June 2014.

Commenting on the overall performance of the multinational corporation, Sime Darby’s president and group chief executive Tan Sri Mohd Bakke Salleh said: “The group has undergone a challenging six months as the global economic and business environment continue to be volatile.”

He said after a tough start to the current financial year, he was happy to see crude palm oil (CPO) prices improving, and continuous improvements in Sime Darby’s operational efficiencies.

“All our divisions have been able to withstand the effects of the demanding market conditions, mainly attributable to the steadfast dedication of our workforce,” he said.

Reviewing performance of various divisions in the second quarter, Sime Darby said its plantation division posted a profit before interest and tax (PBIT) of RM507.5 million for the period under review, a decline of 3 per cent compared to RM522.0 million in the previous corresponding quarter.

The industrial division recorded a PBIT of RM261.5 million in the quarter under review compared to RM285.0 million registered in the same period the previous year. The decline in PBIT by 8 per cent was largely due to lower equipment deliveries and product support sales to the mining sector in Australia.

The motors division reported a PBIT of RM153.4 million in 2QFY2014, a decline of 7 per cent compared to RM164.6 million in 2QFY2013.

“Changes in government regulation and stiff competition in the mass brand vehicle segment continue to impact performances in Singapore and Australia/New Zealand, respectively,” said Sime Darby in its press statement.

However, Malaysia and China/Hong Kong recorded strong results with a PBIT increase of 7 per cent and 32 per cent, respectively.

Sime Darby said its property division achieved a PBIT of RM72.2 million in the second quarter compared to RM61.2 million a year ago, representing an increase of 18 per cent.

The energy & utilities division recorded a PBIT of RM52.5 million compared to RM72.1 million in the previous year’s corresponding quarter. The 27% decline was mainly due to a gain on disposal of a jointly-controlled entity and the write-back of provision for a completed project in the corresponding period last year.

On outlook, Sime Darby said: “Despite the difficult and challenging market conditions…the board expects the group’s performance for the financial year ending 30 June 2014 to be satisfactory.”

It said the global economy remains challenging and the group’s businesses continue to be affected by volatile commodity prices and weaker consumer sentiment as emerging market economies are affected by the US Federal Reserve’s tapering of its bond buying programme.