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Sime Darby 2Q2011 profit rises to RM1.623b

February 29, 2012

KUALA LUMPUR: Conglomerate Sime Darby Bhd posted a higher pre-tax profit at RM1.624 billion for its second quarter ended Dec 31, 2011 compared with RM1.248 billion recorded for the previous corresponding period.

Revenue for the second quarter rose to RM11.389 billion from RM9.994 billion registered for the second quarter of the preceding financial year.

For its six months, pre-tax profit increased to RM3.089 billion from RM2.208 billion recorded for the first half of the previous financial year.

Revenue grew to RM22.453 billion from RM18.669 billion recorded for the first half of the preceding financial year.

The group announced an interim dividend of 10 sen per share for the financial year ending June 30, 2012.

Sime Darby president and group chief executive Mohd Bakke Salleh said the group had a commendable first half with all divisions achieving double-digit earnings growth.

“Our continuous emphasis on enhancing earnings quality has resulted in a robust performance across each division.

“Though there has been considerable economic uncertainty in the global economy over the past six months, our businesses have persevered and remained resilient in the face of a challenging business environment,” he said in a statement today.

Higher realised crude palm oil (CPO) prices and operational efficiency improvements boosted the plantation division’s operating profit to RM1.8 billion in the first half of the year under review, an increase of 38% over the same period the previous year.

For the first six months of financial year 2011, the division achieved an average CPO price of RM2,872/MT against RM2,692/MT in the corresponding period in the previous financial year.

The group’s CPO production was also higher by 10% compared to the first half of FY2010/2011 as oil extraction rate (OER) for the group improved by 0.5% to 21.9%.

The group’s industrial division continued to thrive on the back of robust activity in the mining, logging and construction sectors in Australia and Malaysia to post an operating profit of RM628 million, an increase of 38% over the same period in the preceding year.

New launches

Its motor division’s operating profit rose by 11% from RM277 million to RM308 million, resulting from the strong demand for all marques and the receipt of dividends.

The group’s property division showed a significant increase of 46% in its operating profit to RM193 million in the first half of FY2011/2012 against the same period in the previous year.

This was mainly attributable to the higher percentage of property development works completed and sales in the various townships including USJ Heights, Bandar Bukit Raja and Ara Damansara.

New launches during the quarter under review such as the Isola in Subang Jaya and Eleven Avenue in Bandar Bukit Raja were also well received, with an average takeup rate of 92%.

Sime Darby’s energy and utilities division’s operating profit grew by 127% in the first half of the year under review compared to the corresponding period the preceding year, primarily due to the recognition of deferred revenue of RM99 million from the Malaysia power plant.

The healthcare division posted a higher operating profit of RM14 million, a seven percent increase compared to the same period in the preceding year. This was underpinned by the higher inpatient and outpatient visits, offsetting the higher overhead costs incurred for the Sime Darby Medical Centre Ara Damansara, which had its soft launch on Jan 12, 2012.

Bakke said that the completion of the acquisition of the Bucyrus distribution business in Sime Darby Industrial Caterpillar dealership territories in December 2011 represented an opportunity to grow Sime Darby’s presence in the region and also expand its leading position in its territories in Australia.

He said the addition of the former Bucyrus product line would create new profit opportunities for the division and the group expects the transaction to be accretive to earnings by the fourth quarter of FY2011/2012.

Bakke also assured that the disposal of the Sime Darby Engineering (SDE) fabrication yards remains on track and is targeted to be completed by the end of this financial year.

– Bernama


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