Sime earnings 80.5% down

Quarter three net profit affected by Australian operations

KUALA LUMPUR: Sime Darby Bhd’s net profit fell 80.5% to RM135mil in the third quarter ended March 31, 2018 due to the impact from its Australian operations compared with RM692mil a year ago when there was additional interest income in the earlier period.

It said its profit before interest and tax (PBIT) declined 3.4% to RM225mil from RM233mil a year ago.

Profit before tax slumped 32.3% to RM210mil from RM310mil.

Sime Darby also reported a 37.3% decline in profit from continuing operations of RM148mil from RM236mil a year ago.

In a filing with Bursa Malaysia, Sime Darby said its PBIT included relatively higher charge-out of parts for service jobs in Australia and impairment of billings from the discontinued oil and gas operations which are no longer recoverable in Australia.

Revenue rose 5.4% to RM8.294bil from RM7.867bil. Earnings per share were two sen compared with 10.2 sen.

Revenue from the industrial division rose 21.6%. It reported a PBIT of RM77mil versus RM82mil a year ago.

The division’s Australian operations achieved higher equipment deliveries and product support sales.

The division’s China operations saw a 48% increase in profits due to a buoyant construction industry. However, the Malaysian and Singaporean operations were impacted by lower deliveries to the construction and oil and gas sector respectively.

As for the motors division, the PBIT rose 5.6% to RM133mil from RM126mil due to higher profits from the Greater China and Australia and New Zealand operations.

However, the division’s Malaysian operations posted lowered profitability for the period under review due to a decrease in sales from the mass-vehicle segment, and pre-operational costs for the new BMW engine assembly operations.

Sime Darby’s logistics division reorted a 38.5% increase in PBIT of RM18mil versus RM13mil a year ago due to forex gains of RM5mil.

For the nine months ended March 31, 2018, core PBIT rose 39% to RM788mil from RM568mil in the previous corresponding period.

Earnings fell 5.9% to RM1.756bil from RM1.867bil despite the fact that revenue rose 10.3% to RM25.25bil from RM22.88bil.

Commenting on the overall performance of the group, Sime Darby group chief executive officer Jeffri Salim Davidson said: “We remain focused on our core sectors and shall continue to explore opportunities to accelerate growth and drive our businesses forward.

“On May 3, we officiated the opening of the new BMW engines assembly facility in Kulim, Kedah. It is a testament to our capabilities and the strength of our relationship with BMW. The assembly of BMW engines in Kulim will increase the local content of our cars, making them more cost competitive.”