Sime Darby’s consolidated net earnings up by 152 per cent in the first quarter of 2018

KUALA LUMPUR: Sime Darby Bhd posted consolidated net earnings from both its continuing and discontinuing operations of RM1.316 billion in the first quarter ended Sept 30, 2017, up 152 per cent from the previous corresponding period.

It was the highest ever reported quarterly net earnings for the group, the diversified multinational said in a statement yesterday.

During the quarter under review, Sime Darby which is undergoing one of the largest demergers in Malaysian corporate history, recorded a pre-tax profit of RM376 million from RM312 million in the same quarter last year over a bigger revenue of RM8.14 billion versus RM6.93 billion.

President and Group chief executive Tan Sri Mohd Bakke Salleh said the group has performed well overall.

“At the Plantation Division, higher fresh fruit bunches (FFB) production supported by higher crude palm oil (CPO) prices realised increased earnings whi le recognition of share of profits from the Battersea development project enhanced the Proper t y Div ision’s performance.

“We are also able to report on higher heavy equipment deliveries in Australia and China. The group also recognised gains on disposal of properties and investments and reversal of depreciation and amortisation of discontinuing operations,” he said.

Mohd Bakke said the performance augured well for the divisions as Sime Darby stepped into the final days leading up to the listings of the pure plays, embarking on a new journey to unlock value.

The group is expected to list its plantation and property arms at the end of this month, after obtaining relevant approvals from the Securities Commission and Bursa Malaysia Securities Bhd.

The group’s industrial division achieved a profit before interest and tax ( PBIT) of RM247 million for the quarter under review compared to RM51 mi l l ion previously due in part to a gain on disposal of three properties in Australia, totalling RM156 million.

Its motor division posted a PBIT of RM112 million in the said quarter compared to RM130 million in Q1 FY2017, the decline mainly due to impairment of the distribution rights in Vietnam of RM61 million following the decision to exit the market.

As for the discontinuing operat ions, its plantat ion division registered a PBIT of RM1.284 billion in the said quarter compared with RM329 million in Q1 FY2017.

The almost four-fold increase was due to a number of factors, namely, the gain on sale of land to Sime Darby Property, higher earnings from the upstream operations, a one- off reversal of accruals and lower finance costs.

Excluding the disposal gain of RM676 million and one- off reversal of accruals of RM95 million, the division’s PBIT was higher by 56 per cent.

Meantime, the division’s overall FFB production improved from 2.15 million tonnes in Q1 FY2017 to 2.70 million tonnes in Q1 FY2018 due to focused efforts on the ground to improve operational per formance. — Bernama