Sime Darby posts 69% hike in net profit for first half of 2019

PETALING JAYA: Sime Darby Berhad, which is involved in the industrial, motors, logistics and healthcare sectors, registered a 69% increase in its net profit to RM542 million for the six months ending Dec 31, 2018.

Its revenue stood at RM18.3 billion, which represented a 7.7% increase year on year (YoY).

“Sime Darby’s performance was pretty solid largely due to our industrial division in Australia. Demand for our products and services from the mining and construction sectors there have been strong.

“However, we are seeing a slight softening in the group’s motor business, particularly in China and Singapore,” Jefri Salim Davidson, the chief executive of the company, said at the company’s media briefing for its first half 2019 (1H2019) results today.

During the period, the company recognised a loss of RM109 million from its discontinued BMW franchise in Vietnam.

The industrial division achieved a 53% increase in its core profit before interest and tax (PBIT) YoY at RM348 million due to higher equipment deliveries in Australia and higher margins from engines and product support in China.

The motor division’s core PBIT stood at RM225 million, 16.4% lower than 1H2018. This was mainly due to the softening of the auto industry in the markets the division operates in.

The decline could be attributed to its operations in China which experienced industry-wide steep discounts.

The logistics division, which experienced lower bulk throughout at its Weifang and Jining ports in China, reported a PBIT of RM26 million.

Ramsay Sime Darby Health Care, Sime Darby’s 50:50 joint venture with Ramsay Health Care, achieved a PBIT of RM30 million in 1H2019 which represented an increase of 20% YoY. This was due to higher revenue contribution from its Malaysian and Indonesian operations.