MARKET DEVELOPMENT
UPDATE 1-Malaysia's Sime Darby To Sell Real Estate Assets in Australia, Singapore
UPDATE 1-Malaysia's Sime Darby To Sell Real Estate Assets in Australia, Singapore
(Adds details, CEO quotes)
25/02/2016 (Reuters) - Malaysia's Sime Darby Bhd , the world's largest palm oil planter by land size, said on Wednesday it was looking to sell its real estate assets in Australia and Singapore, in what is seen as a move to cut down on debt.
Chief Executive Mohd Bakke Salleh said the company hoped to raise up to 1.8 billion ringgit ($426.54 million) from the sale.
"We expect to wrap it up by March," he said at a news conference on Wednesday.
Sime Darby owns 13 properties in Australia and three in Singapore.
"Right now we are trying to get more out of our assets. So no thoughts on new assets are to be injected into our group for now," Bakke added.
The conglomerate reported a 22 percent drop in second quarter profit earlier in the day, as it struggled with weak commodity prices and consumer demand.
Sime Darby is the world's largest palm oil planter by land size, and also has significant investments in the real estate and automotive industries.
Bakke said palm oil prices were likely to trade at between 2,500 ringgit per tonne and 2,700 ringgit per tonne until end-March.
Bakke said the forecast is based on lower yield due to the El Nino weather phenomenon and the low price of crude oil, which has a direct effect on biodiesel sales.
Palm oil is used for blending into fuel for the production of biodiesel, which is a substitute for crude oil.
Sime Darby's slide in net profits in the second quarter follows the trend of diminishing profits over the past three quarters.
Profits in the previous quarter dipped 34 percent year-on-year on the back of difficult market conditions "across market divisions", Bakke stated last November.
($1 = 4.2200 ringgit)
25/02/2016 (Reuters) - Malaysia's Sime Darby Bhd , the world's largest palm oil planter by land size, said on Wednesday it was looking to sell its real estate assets in Australia and Singapore, in what is seen as a move to cut down on debt.
Chief Executive Mohd Bakke Salleh said the company hoped to raise up to 1.8 billion ringgit ($426.54 million) from the sale.
"We expect to wrap it up by March," he said at a news conference on Wednesday.
Sime Darby owns 13 properties in Australia and three in Singapore.
"Right now we are trying to get more out of our assets. So no thoughts on new assets are to be injected into our group for now," Bakke added.
The conglomerate reported a 22 percent drop in second quarter profit earlier in the day, as it struggled with weak commodity prices and consumer demand.
Sime Darby is the world's largest palm oil planter by land size, and also has significant investments in the real estate and automotive industries.
Bakke said palm oil prices were likely to trade at between 2,500 ringgit per tonne and 2,700 ringgit per tonne until end-March.
Bakke said the forecast is based on lower yield due to the El Nino weather phenomenon and the low price of crude oil, which has a direct effect on biodiesel sales.
Palm oil is used for blending into fuel for the production of biodiesel, which is a substitute for crude oil.
Sime Darby's slide in net profits in the second quarter follows the trend of diminishing profits over the past three quarters.
Profits in the previous quarter dipped 34 percent year-on-year on the back of difficult market conditions "across market divisions", Bakke stated last November.
($1 = 4.2200 ringgit)