Sime Darby 3Q net profit dips 18.67%

PETALING JAYA: Sime Darby Bhd’s net profit dipped 18.67% to Rm244mil for the third quarter ended March 31, 2022 (3Q22), from Rm300mil in the corresponding quarter last year.

“Excluding the one-off gains recognised in 3Q21, the group has largely sustained its performance for the quarter under review,” Sime Darby said in a statement.

The one-off gains in the 3Q21 totalled to Rm60mil, with gains of Rm39mil from Singapore goods and services tax (GST) refund, and Rm21mil due to reversal of impairment of Eastern and Oriental Bhd.

The group’s revenue decreased by 4.1% to Rm10.57bil in 3Q22 from Rm11.02bil in the last corresponding quarter.

However, the diversified conglomerate also added the net profit for the quarter in review was lower due to its core businesses, industrial and motors divisions were impacted by Covid-19 related disruptions in China and Australasia.

The group also saw lower contribution from its industrial division in Australasia which recorded higher operating costs.

The slowdown in construction activity in China and supply chain constraints caused by the conflict in Ukraine further disrupted the group’s results.

For the nine-month period ended Mar 31, 2022 (9M22), Sime Darby’s net profit was down to Rm825mil from Rm1.21bil in the previous comparative period owing to the one off gains received in 9M21. This includes Rm272mil gains from the Tesco Malaysia disposal, Singapore GST refund and a Rm33mill

reversal of impairment with the sale of stake in Eastern and Oriental Bhd.

Excluding the one-off gains, the net profit took a dip because of lower contribution for the group’s industrial division, which continued to be impacted by significant contraction

in heavy equipment industry volume in China, and lower operating margins in Australasia.

For 9M22, revenue decreased 4.1% to Rm31.8bil compared to Rm33.1bil in the previous comparative period.

“On a core profit level for 3Q22, we were able to deliver resilient results despite increasingly tough market conditions,” Sime Darby group chief executive officer Datuk Jeffri Salim Davidson said.

“Motors Malaysia was a standout performer as profits more than tripled from higher vehicle margins and higher profits from assembly operations,” Jeffri said, adding the economies reopening and the bullish commodity prices should sustain the group’s business in the coming quarters.

“Despite the challenges inherent in the business environment today, Sime Darby continues to be supported by a solid balance sheet, broad geographical footprint, and strong brands,” he added.

Jeffri said the group will continue to capitalise on opportunities to rationalise its portfolio and double its efforts to strengthen its industrial and motors divisions.