Sime Darby 2Q net profit dips 11% on recognition of RPGT

KUALA LUMPUR (Feb 26): Sime Darby Bhd's net profit for the second quarter ended Dec 31, 2019 fell 11% to RM282 million from RM317 million a year earlier, mainly due to recognition of a deferred tax credit of RM129 million arising from the change in real property gain tax (RPGT) rates.

In a bourse filing today, the conglomerate said its quarterly revenue rose to RM10.21 million from RM9.42 billion previously.

Earnings per share slipped to 4.1 sen from 4.7 sen earlier.

For the six months ended Dec 31, Sime Darby’s net profit dipped 2.6% year-on-year to RM528 million from RM542 million, while revenue was higher at RM19.69 billion versus RM18.27 billion previously.

Reviewing its performance, Sime Darby said excluding the RPGT item, its cumulative net profit would have increased by 27.8%.

On its prospects, Sime Darby said the impact of the COVID-19 outbreak cannot be accurately estimated at this juncture.

It said if the COVID-19 outbreak is not contained in the short term, it would have a significant impact on the group’s performance for the financial year ending June 30, 2020.

“However, the group’s strong financial performance in the first half of the financial year ending June 30, 2020 would help cushion the impact,” it said.

In a separate statement, Sime Darby group chief executive officer Datuk Jeffri Salim Davidson said its performance during the first half of FY20 in Greater China, which includes Hong Kong, Macau and Taiwan, was up significantly year-on-year, with the industrial division’s regional operations expanding by 40% and the motors division’s Greater China business more than doubling profits.

“However, we are cautious about the prospects for the second half against the backdrop of the COVID-19 outbreak. Nevertheless, we are hopeful that the strong first half will help cushion the impact,” he said.

At the midday break, Sime Darby shares were flat at RM2, giving it a market capitalisation of RM13.6 billion.

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