Sime Darby reported RM236m in net income for 1Q21

by TMR / pic by TMR FILE

SIME Darby Bhd posted a lower net profit of RM236 million for the group’s first quarter ended 30 September 2021 (1Q21) as its industrial operations in China absorbed the impact of a slowdown in construction activities in the quarter.

While revenue for the quarter was 1.9% lower at RM10.67 billion, compared with RM10.88 billion in Q1 FY2021.

“China is a big part of the Group’s revenue and profits, and the Industrial division was impacted by the slowdown in infrastructure spend in China. Our Motors’ operations in China on the other hand, continued to deliver a strong set of results with higher sales of super-luxury vehicles.

“The Industrial and Motors operations in all other markets performed well considering that many were under some form of movement restriction during the first two months of the quarter,” said group CEO Datuk Jeffri Salim Davidson in a statement today.

The Industrial division’s profit before interest and tax (PBIT) for 1Q22 was down 18.4% to RM160 million.

This was mainly due to a steep decline in profit from its China operations, which faced lower equipment deliveries and rental revenue following the slowdown in China’s construction activities.

Industrial Australasia’s PBIT was 3% higher for the quarter on higher equipment revenue as compared with Q1 FY2021, despite reduced margins from parts sales.

The Motors division’s PBIT for Q1 FY22 improved slightly as Motors China, excluding Hong Kong and Macau, reported a 15% higher PBIT on higher revenue from the sale of super luxury vehicles, and higher profits in Malaysia.

“We have completed the acquisition of Australia’s Salmon Earthmoving Holdings in October. This will not only contribute between RM150 million and RM180 million to the Group’s revenue for FY22, but also ensures our diversification into the construction rental sector and into a new market in Australia, New South Wales. We will continue to look for further growth opportunities and to manage the efficiency of our operations in order to mitigate any impact brought upon by external factors,” added Jeffri.