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Sime Darby’s pre-tax profit surges to RM1.8 billion for first half financial year

KUALA LUMPUR: Sime Darby Bhd reported RM1.765 billion in pre-tax profit for the first half of financial year ended Dec 31, 2009, up 7% from RM1.648 billion in the same period in 2008.

Turnover rose to RM16.169 billion from RM16 billion in the previous financial year.

The Plantation Division recorded RM1.3 billion in operating profit for the first six months this year, an increase of 14%, on the back of higher sales volume of crude palm oil coupled with improvements in the Indonesian operations.

Indonesian yields rose to 10.5 metric tonnes per hectare from 8.3 metric tonnes a hectare while palm oil extraction rate increased to 23.1% during the 2009/2010 first half financial year from 22.4% over the same period last year, said Sime Darby in a statement.

Reaping the benefits from the gradual economic upturn, the Property Division reported a revenue of RM676 million for 1HFY2009/10, a 19% increase from the same period in the last financial year, attributed to the recovery of the property market and the strong performance of its townships.

Operating profit, which includes gains from disposal of a subsidiary company, increased by 32% to RM179 million from the same period last year.

The Motors Division continues to perform strongly, with a 37% revenue increase to RM4.7 billion from the same period last year, in line with the current rebound in global economic conditions.

Reflecting the revenue improvements, operating profit surged by 31% to RM148 million from the same period last year, due to better results from operations in Singapore, New Zealand and Thailand, it said.

Industrial Division’s revenue has been fairly stable at RM4.1 billion. However, operating profit declined by 15% to RM377 million from the same period last year, attributable to lower sales and margins in Australasia and Singapore for the period under review.

Lower sales were partly due to deferments in capital expenditure by customers last year in light of depressed economic conditions during that period.

The Energy & Utilities Division recorded 35% lower revenue due to a 44% decline in revenue from the Oil & Gas and Engineering business unit as compared with the same period last year. The division registered an operating loss of RM110 million attributable to cost escalation on fabrication and engineering projects as a result of higher offshore costs.

Commenting on the group's performance, Datuk Seri Ahmad Zubir Murshid, Sime Darby President and Group Chief Executive, said he was pleased with the performance of the Plantation, Property and Motors Divisions, which have reported significant improvements in their results for the first half of FY2009/10.

However, there were issues with the Energy & Utilities Division, he said, adding that: “We have faced several challenges with the Oil & Gas Business Unit, especially with operational efficiency and project management.

“Nevertheless, with a new management team on board, measures have been taken to increase operational efficiency and improve our project management capabilities,” he said.

He also said improvements in the Plantation Division’s Indonesian operations and Motor Division are testament to the group’s ability to ensure these businesses realise their full potential.

The group was confident it would be able to achieve similar results with the Oil & Gas Business Unit, he added. -- Bernama

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