Sime Darby FY19 profit jumps 53.3%, declares 8 sen dividend

27 Aug 2019 / 14:19 H.

PETALING JAYA: Sime Darby Bhd registered a 12.9% increase in net profit to RM184 million for the fourth quarter ended June 30, 2019 against RM163 million in the previous corresponding period, underpinned by higher contribution from the industrial and motors segments.

This was on the back of an 8.7% rise in revenue to RM9.32 billion from RM8.58 billion.

The group has proposed to declare a dividend of 8 sen comprising 7 sen interim dividend and 1 sen special dividend.

Sime Darby’s full-year net profit surged 53.4% to RM948 million from RM618 milion in the previous year with revenue expanding 6.9% to RM36.16 billion from RM33.83 billion.

The group said in a statement that its industrial division achieved a 30.4% increase in profit before interest and taxes (PBIT) in FY19 at RM798 million, due to higher margins from product support and improved contribution from equipment deliveries in key markets of Australia, China and Singapore.

The motors division reported a PBIT of RM628 million in FY19, 15.7% higher than the previous year. Stripping out one-off items, the segment’s core PBIT was 11% lower due to lower margins as a result of overall competitive market conditions, mainly in Singapore and Hong Kong.

Meanwhile, the logistics division reported a lower PBIT of RM2 million compared with RM74 million in the previous year, dragged down by its share of loss and impairment for Weifang Port Services of RM119 million. The impairment was mainly due to lower throughput projected as a result of trade tensions and uncertainties surrounding the port consolidation exercise.

Looking ahead, Sime Darby said barring any unforeseen circumstances, the group expects its performance for the financial year ending June 30, 2020 to be satisfactory.

It noted that the industrial division’s results are underpinned by the strong momentum of the mining sector and increasing level of infrastructure spending as the Australia government attempts to drive growth back to trend.

“The proposed acquisition of Gough Group Limited in New Zealand is expected to further strengthen the division’s growth in the coming years. “

Sime Darby said the motors division expects the regional automotive market to remain competitive.

“In China, demand for the luxury segment remains stable on consumption upgrade and new luxury car models. The division’s outlook for the Malaysian operations remains positive with more certainty expected after the revised National Automotive Policy 2019 is released.”

However, it said the Logistics division is weighed down by the fallout from trade tensions on the export economy. The group will continue to focus on strengthening its business performance by improving operational productivity and diversifying cargo type and customers.

At the noon break, Sime Darby’s share price was down 1 sen to RM2.08 with 1.56 million shares changing hands.

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