SIME Darby Bhd’s net profit slipped to RM244 million in the third quarter ended March 31, 2022 (3Q22), compared to RM300 million posted a year ago mainly due to lower profit from both the industrial and motors divisions which were impacted by Covid-19 related disruptions in both China and Australasia.
This saw lower contribution from industrial Australasia which recorded higher operating costs.
Further impacting results was a slowdown in construction activity in China and supply chain constraints which were compounded by the military conflict in Ukraine. 3Q21 also recorded one-off gains of RM39 million Singapore GST refund and RM21 million net reversal of impairment of Eastern & Oriental Bhd.
In a filing to Bursa Malaysia, the company stated revenue for the period stood at RM10.6 billion against RM11 billion in the same period last year.
For the nine-month period ended March 31, 2022, net profit was down to RM825 million from a year ago in the absence of the RM272 million gain from the Tesco Malaysia disposal, Singapore GST refund and a RM33 million net reversal of impairment with the sale of stake in Eastern & Oriental.
Excluding the one-off gains, net profit for the nine-month period was lower mainly due to reduced contribution from the industrial division, which continued to be impacted by significant contraction in heavy equipment industry volume in China, and lower operating margins in Australasia. Revenue was down 4.1% to RM31.8 billion for the period.
“On a core profit level for 3Q22, we were able to deliver resilient results despite increasingly tough market conditions. Motors Malaysia was a standout performer as profits more than tripled from higher vehicle margins and higher profits from assembly operations. The reopening of economies and bullish commodity prices should sustain our business in the coming quarters,” said Sime Darby group CEO Datuk Jeffri Salim Davidson in a separate statement. –TMR