Sime Darby Q2 net profit more than halves on demerger

PETALING JAYA: Sime Darby Bhd net profit for the second quarter ended Dec 31, 2017 more than halved on the inclusion of only two months of the profits from the now demerged Sime Darby Plantation Bhd and Sime Darby Property Bhd.
The group made a net profit of RM305 million for the quarter under review, compared with RM653 million for the same quarter in 2016.
Profit from continuing operations following the demerger was down 60% to RM85 million, compared with RM215 million for the corresponding quarter in 2016 on the reclassification of Yayasan Sime Darby as assets held for sale and consequent write down of RM61 million.
The group posted revenue of RM8.8 billion for the quarter compared with RM8.1 billion for the corresponding quarter in 2016.
Sime Darby, which is a global trading and logistics player, said the improvement in mining business, the Industrial operations in Australia have seen a pick-up in recent months in the product support business along with an increase in the order book, while its China operations have remained strong with increased demand from the construction industry.
The Motors division’s performance is expected to improve through higher sales expected from launches of new car models in the forthcoming quarters and the on-going measures to expand the Motors operations, even as it continues to be impacted by strong competition and cautious consumer sentiment.
Its port operations continue to face competition from other ports and alternative modes of transportation, but the group believes its higher tonnage berths that is able to receive higher yielding cargo and the expected commencement of operations at the liquid terminal joint venture later this financial year, would support the financial performance of the Weifang Port operations.
The board expects the group’s core profits for the financial year ending June 30, 2018 to be higher than that of the previous financial year.
Net profit for the six month period was up RM1.6 billion for the period under review, from RM1.2 billion for the same period in 2016.
Revenue was up 12.9% to RM17.0 billion for the period ended Dec 31, 2017, compared with RM15.0 billion for the period ended Dec 31, 2016.

The group's share price was up two sen to RM2.75 with some 11.7 million shares changing hands.