Sime Darby’s 1QFY20 net profit up 9.3% on equipment sales abroad

By HARIZAH KAMEL / Pic By HUSSEIN SHAHARUDDIN

SIME Darby Bhd’s net profit rose 9.3% to RM246 million in the first quarter ended Sept 30, 2019 (1QFY20), from RM225 million recorded a year ago, largely on strong growth in the group’s industrial division, particularly operations in Australasia and China, as well as improvement in the China motors business.

Quarterly revenue climbed 7.1% to RM9.48 billion from RM8.85 billion previously, the group told Bursa Malaysia yesterday.

Its industrial division recorded wins in most markets, riding on the mining and construction waves to enjoy increased sales in China and the Australasia region, Sime Darby group CEO Datuk Jeffri Salim Davidson (picture) said.

The group’s orderbook for the industrial division stood at RM2.5 billion as at Sept 30, 2019.

The motors division also saw significant improvements, particularly in the China market this quarter from higher margins from vehicle sales.

“This is a promising start to the financial year ending June 30, 2020 (FY20), given the uncertainties surrounding the global economy and the tough competition, especially in the motors segment.

“While we are cautiously optimistic of the prospects ahead, we remain focused on integrating our new acquisitions and on executing our strategies,” Jeffri said.

The industrial division reported a profit before interest and tax (PBIT) of RM260 million for the quarter compared to RM184 million in the same period last year, boosted by improvements in all regions — particularly Australasia.

For the motors division, PBIT jumped 27.6% on improved margins at BMW China, although PBIT for Malaysian operations fell 20.5% year-on-year as sales were exceptionally high in 1QFY19 due to the tax holiday period.

Barring unforeseen circumstances and amid cautious market sentiment brought on by global economic uncertainties, the group expects its performance for FY20 to be satisfactory.