KUCHING: Sime Darby Bhd’s (Sime Darby) net profit for the third quarter of financial year 2014 (3QFY14) grew 23 per cent year-on-year (y-o-y) to RM853 million compared with RM691 million recorded in 3QFY13.
However, for the nine months ended March 2014, the conglomerate’s earnings dipped 9.63 per cent y-o-y to RM2.16 billion against nine months ended March 2013 of RM2.39 billion.
Meanwhile, the company in a press release yesterday said its net profit improved in 3QFY14 thanks to better results from its plantation division and a lower effective tax rate incurred.
Sime Darby’s president and group chief executive Tan Sri Mohd Bakke Salleh said, “The group had produced a satisfactory performance.
“Despite operating in a challenging environment, Sime Darby is on track to achieve its net profit Key Performance Indicator (KPI) of RM2.8 billion for the financial year ending June,30 2014.
“The resilient performance of the plantation division is testament to the initiatives that have been put in place to enhance operational efficiencies of the division.
“With the uncertainty in the global economy, it is important, now more than ever, for us to intensify our efforts to enhance efficiency and institute prudent cost management and saving measures in order to remain competitive and continue to deliver long-term returns to our shareholders,” Bakke said.
He added that the group also continues to show progress in the key long-term strategic initiatives.
“The motors division (Sime Darby Auto Connexion Sdn Bhd) and SISMA Auto have formed a joint venture to represent Jaguar and Land Rover in Malaysia.
“The joint venture, Jaguar Land Rover (Malaysia), has been appointed as the exclusive importer for Jaguar and Land Rover marques.
“Another significant development is the plantation division’s initiative to build and nurture a sustainable portfolio of palm-related industrial biotechnology companies with its first investment in US-based Verdezyne Incorporation” Mohd Bakke said.
On segmental performance wise, Sime Darby said its plantation division posted a profit before interest and tax (PBIT) of RM454.8 million for 3QFY14, an increase of 10 percent compared with RM413.2 million in 3QFY13.
As for the midstream and downstream operations, Sime Darby noted it recorded a lower profit of RM19.5 million in 3QFY14 compared with a profit of RM39.7 million in 3QFY13.
For its automotive division, Sime Darby said its PBIT declined 21 per cent y-o-y to RM142.9 million in 3QFY14 compared with PBIT of RM181.6 million in 3QFY13.
Sime Darby revealed that the lower profit for its automotive division was attributabed to lower contribution from the company’s Singapore operation due to changes in government regulation, as well as lower earnings from the China/Hong Kong operations because of competitive market conditions.
However, Sime Darby observed that the Malaysia operation posted a better result driven by higher sales in the brands represented.
For property division, Sime Darby noted the division’s PBIT declined 24 per cent y-o-y to RM105.5 million in 3QFY14 compared with RM139.3 million registered in 3QFY13.
Sime Darby said the decline in earnings was due to the gain registered on the sale of land in Pagoh, Johor in the previous financial year.
Nevertheless, Sime Darby noted its property division’s average take-up rate continued to remain strong.
The company pointed out that new launches of double-storey terrace houses such as the Garinia in City of Elmina and Nahara 1 & 2 in Bandar Bukit Raja garnered an average take-up rate of 89 per cent since their launches between January to March.
On the international front, Sime Darby said the launch of Phase Two of the Battersea Power Station project has received overwhelming response with 95 per cent of the 254 units reserved in the first week of sales.
The group also said its energy and utilities division’s PBIT dropped 34 per cent to RM39.1 million in 3QFY14.
The company attributed the lower profit due to the port operations in China recorded a lower profit contribution as a result of lower throughput caused by the slowdown of the Chinese economy.
However, Sime Darby said the decline in PBIT was mitigated by higher contribution from the power business.