Sime Darby more than triples quarterly earnings on one-off MVV land sale

PETALING JAYA (May 25): Sime Darby Bhd more than tripled its earnings in the third quarter ended March 31, 2026 from a year earlier, driven principally by a one-off gain of RM434 million from the disposal of land at Malaysia Vision Valley (MVV) in Negeri Sembilan, even as revenue declined.

Net profit attributable to shareholders surged 238.9% to RM654 million from RM193 million in the same quarter a year earlier, whilst revenue slipped 3.4% to RM15.75 billion from RM16.31 billion, weighed in part by lower industrial equipment sales in Malaysia.

Profit before tax more than doubled to RM899 million from RM393 million previously. Excluding one-off items, the group said core net profit for the quarter rose 55.6% to RM263 million, with all three divisions registering higher underlying profits.

MVV disposal underpins quarterly result

The MVV disposal gain was recorded under gain on disposal of properties, which totalled RM412 million for the nine months ended March 31. The effective tax rate for the quarter came in at 23.0% — below the applicable statutory rate of 24.0% — partly reflecting the lower Real Property Gains Tax rate applicable to land disposals in Malaysia.

Industrial division steady on Australian demand

The Industrial division, which supplies Caterpillar-branded heavy equipment, product support and after-sales services to the mining, construction and infrastructure sectors, posted profit before interest and tax (PBIT) of RM245 million for the quarter, up 10.9% year-on-year, on higher equipment and product support margins in Australia.

This was partly offset by lower revenue and higher operating expenses in Malaysia, alongside impairment of receivables. For the nine-month period, Industrial PBIT eased 7.0% to RM838 million, with Australian operations impacted by subdued product support and rental activity in the first half of the year.

Medium- to long-term demand from Australia's mining sector for equipment and servicing is, however, expected to remain strong, the group said.

Motors and UMW deliver improved underlying results

The UMW division — encompassing automotive assembly, manufacturing and engineering businesses — recorded PBIT of RM196 million for the quarter, broadly in line with the prior corresponding period, as improved lubricants results offset lower automotive margins. For the nine months, UMW's PBIT grew 6.8% to RM726 million.

The Motors division posted a PBIT of RM143 million, up 25.4%, driven by higher electric vehicle sales in Singapore and improved margins and lower expenses in Hong Kong.

For the nine months ended March 31, group net profit rose 10.9% to RM1.44 billion from RM1.30 billion a year earlier, with the improvement attributed primarily to lower finance costs from reduced average borrowings, alongside stronger Motors performance. Cumulative revenue was marginally higher at RM52.76 billion against RM52.30 billion in the same period last year.

Net cash from operating activities for the nine months stood at RM2.93 billion, compared with RM3.80 billion from continuing operations a year earlier, reflecting changes in working capital. Total borrowings as at March 31, stood at RM6.51 billion, with Australian dollar-denominated debt the largest exposure at RM3.53 billion equivalent.

Net assets per share edged up to RM2.85 from RM2.82 at end-June 2025. An interim dividend of 3.0 sen per share, amounting to RM204 million, was declared on February 26, and paid on March 31. No further dividend was declared for the quarter.

Outlook cautious but full-year guidance maintained

Looking ahead, the board said it expects the group's core financial performance for the full year ending June 30, to be consistent with that of financial year 2025. Business conditions are anticipated to remain subdued amid ongoing geopolitical tensions, slower consumer demand and heightened competition in the motors sector, though Malaysian affordable vehicle sales remain resilient, the group noted.

"Our results this quarter reflect the continued resilience of our portfolio, even as we navigate a more complex operating environment. Our core businesses of industrial equipment and automotive have held their ground against ongoing market pressures," said group CEO chief Datuk Jeffri Salim Davidson.

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