MARKET DEVELOPMENT
Sime Darby's Q3 Pre-tax Profit Declines To RM595.2 Million
Sime Darby's Q3 Pre-tax Profit Declines To RM595.2 Million
22/05/2015 (Bernama) - Sime Darby Bhd's pre-tax profit for the third quarter ended March 31, 2015, declined 38 per cent to RM595.2 million from RM960.54 million recorded in the same period last year.
Revenue decreased to RM9.99 billion from RM10.1 billion previously.
President and Group Chief Executive Tan Sri Mohd Bakke Salleh said the third quarter results continued to be negatively impacted by tough business conditions amid macroeconomic headwinds in several regions.
"The weak markets persisted as commodity prices continued to remain soft, weighing on the overall earnings of the group," he said in a filing to Bursa Malaysia.
However, he said the group had implemented strict controls on capital expenditure and cost containment measures while focusing on enhancing operational efficiencies.
He said the motor division's expansion into new territories and the property division's focus on integrated development and affordable properties were part of the key strategic initiatives that had given Sime Darby the resilience to weather the challenging market conditions.
Besides, he said the group was currently undertaking integration measures to realise the immediate and long-term potential synergies with newly acquired New Britain Palm Oil Ltd.
The acquisition was completed on March 2 this year.
In the third quarter, the plantation, industrial and motor divisions recorded a lower profit before interest and tax (PBIT) of RM99.6 million, RM79.2 million and RM83 million, respectively, compared with RM454.8 million, RM220.6 million and RM142.9 million recorded in the same period last year.
The decline in plantation division profits was due to lower crude palm oil prices and lower production of fresh fruit bunches as a result of replanting activities that reduced its mature hectarage and crop production.
Nevertheless, FFB output recorded a month-on-month increase in March, potentially signaling the end of the low crop cycle.
The midstream and downstream operation of the plantation division also doubled to RM39.6 million from RM19.5 million in the previous year's corresponding quarter mainly attributed to favourable results in the oil and fats segment.
On industrial division, the lower PBIT was mainly due to the continued downturn in the Australian mining industry which resulted in lower equipment deliveries and product support sales.
The division also faced intensive competition in other regions such as Malaysia, Singapore and China particularly in the mining, construction and plantation sectors resulting in softer market conditions.
The division's order book for the current quarter stood at RM2.4 billion, with a lead time of between four to 12 months.
On the motor division, the weaker PBIT resulted from reduced earnings in Malaysia, China/Hong Kong and Singapore mainly due to lower contributions from the mass market segment, super luxury operations and increase in certificate of entitlement (COE) premiums, respectively.
However, the Australia/New Zealand operations achieved higher contributions driven by strong showings of its luxury vehicles and truck business, respectively, while Vietnam operations also continued to perform well, riding on the robust growth of the premium vehicle segment.
Meanwhile, the property division's PBIT increased 160 per cent to RM273.8 million from RM105.5 million in the same period last year mainly attributable to higher profits from the Elmina East (Selangor) and Taman Pasir Putih (Johor) townships.
The higher profit was also attributable to the increased contributions from the construction progress of the Pagoh Education Hub project and gains from the joint venture land sale for development in Serenia City, Selangor.
The division's unbilled sales stood at RM1.8 billion, as at March 31, 2015.
The energy and utilities division also achieved a higher PBIT of RM19 million against a loss of RM2.3 million in the previous corresponding quarter primarily due to the improved performance in general cargo and container throughput from the Weifang and Jining Ports in China.
For the nine-month period, Sime Darby's pre-tax profit declined 28 per cent to RM1.9 billion from RM2.58 billion posted in the same period last year.
Revenue, decreased to RM30.86 billion from RM31.39 billion previously.
Revenue decreased to RM9.99 billion from RM10.1 billion previously.
President and Group Chief Executive Tan Sri Mohd Bakke Salleh said the third quarter results continued to be negatively impacted by tough business conditions amid macroeconomic headwinds in several regions.
"The weak markets persisted as commodity prices continued to remain soft, weighing on the overall earnings of the group," he said in a filing to Bursa Malaysia.
However, he said the group had implemented strict controls on capital expenditure and cost containment measures while focusing on enhancing operational efficiencies.
He said the motor division's expansion into new territories and the property division's focus on integrated development and affordable properties were part of the key strategic initiatives that had given Sime Darby the resilience to weather the challenging market conditions.
Besides, he said the group was currently undertaking integration measures to realise the immediate and long-term potential synergies with newly acquired New Britain Palm Oil Ltd.
The acquisition was completed on March 2 this year.
In the third quarter, the plantation, industrial and motor divisions recorded a lower profit before interest and tax (PBIT) of RM99.6 million, RM79.2 million and RM83 million, respectively, compared with RM454.8 million, RM220.6 million and RM142.9 million recorded in the same period last year.
The decline in plantation division profits was due to lower crude palm oil prices and lower production of fresh fruit bunches as a result of replanting activities that reduced its mature hectarage and crop production.
Nevertheless, FFB output recorded a month-on-month increase in March, potentially signaling the end of the low crop cycle.
The midstream and downstream operation of the plantation division also doubled to RM39.6 million from RM19.5 million in the previous year's corresponding quarter mainly attributed to favourable results in the oil and fats segment.
On industrial division, the lower PBIT was mainly due to the continued downturn in the Australian mining industry which resulted in lower equipment deliveries and product support sales.
The division also faced intensive competition in other regions such as Malaysia, Singapore and China particularly in the mining, construction and plantation sectors resulting in softer market conditions.
The division's order book for the current quarter stood at RM2.4 billion, with a lead time of between four to 12 months.
On the motor division, the weaker PBIT resulted from reduced earnings in Malaysia, China/Hong Kong and Singapore mainly due to lower contributions from the mass market segment, super luxury operations and increase in certificate of entitlement (COE) premiums, respectively.
However, the Australia/New Zealand operations achieved higher contributions driven by strong showings of its luxury vehicles and truck business, respectively, while Vietnam operations also continued to perform well, riding on the robust growth of the premium vehicle segment.
Meanwhile, the property division's PBIT increased 160 per cent to RM273.8 million from RM105.5 million in the same period last year mainly attributable to higher profits from the Elmina East (Selangor) and Taman Pasir Putih (Johor) townships.
The higher profit was also attributable to the increased contributions from the construction progress of the Pagoh Education Hub project and gains from the joint venture land sale for development in Serenia City, Selangor.
The division's unbilled sales stood at RM1.8 billion, as at March 31, 2015.
The energy and utilities division also achieved a higher PBIT of RM19 million against a loss of RM2.3 million in the previous corresponding quarter primarily due to the improved performance in general cargo and container throughput from the Weifang and Jining Ports in China.
For the nine-month period, Sime Darby's pre-tax profit declined 28 per cent to RM1.9 billion from RM2.58 billion posted in the same period last year.
Revenue, decreased to RM30.86 billion from RM31.39 billion previously.