KUALA LUMPUR: Sime Darby Bhd
's earnings surged 126% to RM644mil in the second quarter ended Dec 31, 2016 from a year ago, boosted by the plantations division.
The plantation-property heavyweight said on Monday its earnings jumped from RM285mil. Earnings per share rose 4.3% to RM12.34bil from RM11.83bil. It declared an interim dividend of six sen a share.
In the first half, its earnings rose 78.5% to RM1.08bil from RM609mil in the previous corresponding period. Its revenue rose nearly 2% to RM22.44bil from RM22bil.
Sime Darby’s president and group chief executive Tan Sri Mohd Bakke Salleh said: “This significant improvement in our earnings can be attributed largely to the increase in crude palm oil (CPO) prices and better production of fresh fruit bunches (FFB) over the period in review.”
The plantation division’s profit before interest and tax (PBIT) jumped nearly four-fold to RM568mil in Q2FY17 from RM159mil a year ago.
Underpinning the growth was mainly due to higher average crude palm oil (CPO) price realised and better fresh fruit bunches (FFB) production in the current period, especially in Indonesia and Papua New Guinea.
The division’s average CPO price realised was RM2,835 a tonne for the quarter under review versus RM2,066 a tonne a year ago. The price increase was mainly driven by an industry-wide production deficit due to the lingering effects of 2015’s El Nino weather phenomenon.
The industrial division reported a PBIT of RM55mil in Q2FY17 from RM72mil a year ago, down 24%, mainly due to lower engine deliveries and reduced trading margins across Asian dealerships, mainly in Singapore and China/Hong Kong (HK).
Weak market conditions in the marine and shipyard sectors in Singapore and China/HK continued to hamper profitability, resulting in a PBIT decline of 86% and 5% respectively. The
The motors division posted a PBIT of RM136mil in Q2FY17 compared with RM146mil a year ago, down 7%. Earnings from Singapore in the period under review dropped by 20% due to reduced contribution from the luxury segment which was impacted by the downtrend in Certificates of Entitlement (COE) bidding.
The property division registered a PBIT of RM137mil, up 61% from RM85mil a year ago. This was largely attributable to contributions of RM95mil from the Battersea Power Station project and a gain of RM58 million on compulsory land acquisition for the Damansara – Shah Alam Elevated Expressway (DASH). The Battersea Power Station project recognised its maiden profit from the completion of two residential block units under Phase 1.
The Logistics Division reported a PBIT of RM11mil, down 71% from RM38mil mainly due to the recognition of deferred income (government grant) of RM19mil recorded in the second quarter of last financial year.
Apart from this, the lower PBIT was mainly attributable to reduced average tariff resulting from stiff competition from neighbouring ports.
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