SEEDS OF SUCCES
Profit rises 5.4pc due to higher palm oil prices and fresh fruit bunches output
SIME Darby Bhd posted a higher net profit of RM699 million in the third quarter. The plantation division remained the biggest earnings contributor on the back of higher palm oil prices and better production of fresh fruit bunches.
SIME Darby Bhd’s net profit rose 5.4 per cent to RM699 million in the third quarter ended March 31 from RM663 million a year ago, thanks to higher palm oil prices.
Revenue came in at RM12.5 billion compared with RM10.2 billion last year.
President and group chief executive Tan Sri Mohd Bakke Salleh said the higher profit was also due to better production of fresh fruit bunches in Malaysia, Indonesia and Papua New Guinea.
The plantation division remained the biggest earnings contributor of around 60 per cent to the group.
Sime Darby is Malaysia’s largest conglomerate with core businesses in plantation, property, heavy machinery, motors, seaport operations and healthcare.
It is the world’s largest listed oil palm planter with more than a million hectares of landbank across Malaysia, Indonesia, Papua New Guinea and Liberia.
At a media briefing, here, yesterday, Bakke said palm oil prices were likely to trade sideways between RM2,600 and RM2,800 per tonne in the next couple of months.
Sime Darby has 4,452ha of plantation land on Carey Island, Klang.
“Over the next decade or so, this agricultural land will be redeveloped into real estate, namely the Integrated Maritime City, as Northport (M) Bhd and India’s Adani Group build up Port Klang’s third terminal in Carey Island,” said Bakke.
Northport, which is MMC Corp Bhd’s unit, and Weifang Sime Darby Port Co Ltd recently signed a memorandum of understanding to establish a sister port relationship. They will cooperate in port management and facilitate halal trade shipment between Malaysia and China.
“Halal is big business. This partnership aims to capture a market that is growing by 10 per cent a year. Weifang Port is strategically located in the prime region of the Bohai Sea economic belt. We intend to set up a halal hub there,” said Bakke.
Sime Darby is on track to split its plantation and property businesses for separate listings on Bursa Malaysia by year-end.
Reiterating that the listings were not initial public offerings, Bakke said applications for regulatory approvals would be submitted in a few months.
When the plantation and property businesses debut on Bursa Malaysia, Sime Darby will no longer own any stakes in them.
The group will remain listed, focusing on industrial equipment, automotive, logistics and healthcare segments.
“The six key positions of chief executive officers and chief financial officers in the three entities will be decided by Sime Darby’s board of directors and key shareholders,” said Bakke.
Asked if he would continue to lead any of the three entities, he said: “I don’t know, it’s really up to the decision makers. The candidates for the six key positions are most likely from within. We could also see one or two new faces. The announcement will be made towards the end of the year.”
Bakke also said Sime Darby was restructuring its US$800 million (RM3.4 billion) Islamic bonds.
Its plantation division achieved first-time corporate ratings of “Baa1” and “BBB+” from Moody’s and Fitch Ratings, both with “stable” outlooks.