Sime Darby FY18 net profit falls to RM1.92 billion

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Sime Darby saw an improved pretax profit for the Industrial division included profits from property disposal in Australia, while its FY17 results were affected by impairments from the Bucyrus investment totalling RM257 million. — Reuters photo

KUALA LUMPUR: Sime Darby Bhd’s net profit for the financial year ended June 30, 2018 (FY18) fell to RM1.92 billion from RM2.44 billion recorded in the same quarter last year for its continuing operations comprising the Industrial, Motors, Logistics and Healthcare businesses.

However, revenue improved 8.8 per cent year-on-year (y-o-y) to RM33.83 billion from RM31.09 billion in the same period last year for continuing operations as the plantation and property businesses were deconsolidated from the group in November last year.

In a statement yesterday, group chief executive officer Jeffri Salim Davidson attributed the group’s strong earnings for FY18 largely to the recovery of the mining sector in Australia and increased infrastructure spending in China.

The group’s Industrial division achieved a pretax profit of RM612 million for FY18 compared to a pre-tax loss of RM4 million in the previous financial year.

“The recovery of the mining sector in Australia was a real boon for us. We saw a lot more activity in our workshops and enjoyed higher margins from improved sales for parts. Equipment sales in China also recorded strong results due to an increase in construction and infrastructure spend,” he said.

The group noted the improved pretax profit for the Industrial division included profits from property disposal in Australia, while its FY17 results were affected by impairments from the Bucyrus investment totalling RM257 million.

For its motors division, the group said its pretax profit fell to RM543 million for FY18, compared to RM633 million in the last financial year, impacted by the losses from the group’s exit from the BMW business in Vietnam.

It said excluding this and other one-off items, the division’s profits increased by 3.4 per cent mainly due to higher profits from the Hong Kong, Macau and Australia operations.

The group said its logistics division reported a higher pretax profit of RM74 million for FY18, compared to RM64 million the previous year, due to higher throughput at Weifang Port and higher profits from Weifang Water.

Meanwhile, the group’s healthcare division, Ramsay Sime Darby Health Care, Sime Darby’s 50:50 joint venture with Ramsay Health Care, also achieved higher revenue for the year under review, which contributed to a 58 per cent increase y-o-y to the group’s share of profits.

The joint venture’s Malaysian operations registered improved results from higher revenue and lower corporate expenses, it said. The group declared a second interim dividend of four sen per share and a special dividend of two sen per share for FY18.

Together with the first interim dividend of two sen per share, the total dividend for the financial year is 8 sen per share, it added. — Bernama