PETALING JAYA: Sime Darby Bhd’s net profit rose 14.2% to RM281 million for its first quarter ended Sept 30, 2020 compared to RM246 million reported in the first quarter of last year mainly due to the strong performance from its motors division, particularly in China.
The quarter’s revenue stood at RM10.88 billion, a 14.8% increase from RM9.48 billion registered previously.
It told the local bourse that the group’s industrial segment saw a 24.6% decline in profits to RM196 million in 1Q’21 attributed to lower equipment deliveries and parts sales in Australia following the fall in coal prices, which was offset by an hike in profits from its operations in China.
Its motor division saw profits increased by 66.4% to RM223 million in the current quarter with most of its markets recording higher profit and supported by a government grant income of RM33 million.
Meanwhile, Sime Darby’s logistics segment saw profits remain unchanged at RM6 million despite a 36.5% decline in bulk cargo throughput due to stiff competition, which was offset by a RM5 million forex gain.
Its others segment turned a profit of RM13 million which includes a forex gain of RM7 million from the legacy oil & gas operations against a RM16 million loss reported previously.
It’s group CEO Datuk Jeffri Salim Davidson attributed the solid first quarter results to China’s economic recovery.
He elaborated that its operations in Greater China performed exceptionally, with the motors and industrial segment reporting an excess of 70% and 30% growth respectively.
“The motors division staged a comeback, with most markets posting an increase in profits thanks to the easing of restrictions which facilitated consumer spending,” said Davidson in a press release.
“However, we also saw the impact of lower coal prices in our Industrial division, with a cut back in mining operations translating to lower equipment deliveries and parts sales.”
Davidson acknowledges that the results are an encouraging start to FY2021, but it remains mindful of the ever-present risk of the resurgence of Covid-19 that could adversely impact the global economy and the group’s prospects ahead.
Moving forward, he revealed that the group is focused on executing its strategies and managing efficiency in equal measure.
