30/08/2012 (4-traders) - Sime Darby Bhd. (4197.KU), a Malaysian plantation-to-healthcare conglomerate, plans to increase capital spending to as much as 7.75 billion ringgit ($2.48 billion) for the 2013 fiscal year, optimistic of long-term demand for its edible oil and industrial equipment after profit hit record high a year earlier.

A big bulk of the capital expenditure, up from MYR6.3 billion in financial year 2012, will go toward expanding its mainstay plantation business, Mohd Bakke Salleh, president and group chief executive of Sime Darby, said at an earnings conference. The company aims to double its landbank by 2015 from over 870,000 hectares currently.

Sime Darby joins a list of growing companies from the Southeast Asian nation, including smaller rival Felda Global Ventures Holdings Bhd (5222.KU) and Malaysia's second largest lender by assets CIMB Group Holdings Bhd (1023.KU), to deploy cash to expand rapidly at home and abroad as profits swell to record high.

In June, Sime Darby teamed up with local property developer SP Setia Bhd. to acquire Battersea Power Station in the U.K. for $620 million for a real-estate project. The power station is one of London's most iconic landmarks that was famously featured on the cover of Pink Floyd's album Animals.

"While fluctuations in commodity prices may have an impact on earnings in the short term, the plantation and industrial divisions are expected to remain resilient in the long term due to robust long-term demand for edible oils and heavy machinery equipment in the mining sector," he said.

Sime Darby--the world's largest listed palm-oil producer by acreage--reported Wednesday a 16% drop in its fourth-quarter net profit because of lower crude palm oil prices. Net profit for the three months ended June 30 was MYR1.10 billion compared with MYR1.31 billion during the same quarter a year earlier. Revenue grew 8.1% to MYR14.12 billion from MYR13.06 billion, according to a statement to the Malaysian stock exchange.

Crude palm oil prices averaged MYR3,056 a ton in April-July, lower than MYR3,114 a year earlier.

Apart from its mainstay plantation business, Sime Darby is involved in property development, industrial equipment, automotives, port operations and health care.

Sime Darby's strong balance sheet and a diverse portfolio of businesses will help the company weather the challenges, Mr. Bakke said, adding that the company is confident of "solid returns."

For the full year, Sime Darby's net profit rose 13% to MYR4.2 billion, a new record high, from MYR3.7 billion. Though the plantation business continued to be the main contributor to the company's profit, the industrial segment's profit growth gained pace with new orders for mining equipment from Singapore, Australia and Malaysia, the company said.

Crude palm oil price averaged MYR2,925 a ton in the just-ended fiscal year, higher than MYR2,906 a year earlier, the company said. Production of fresh fruit bunches declined 3% to 9.8