Sime Darby's motor division recovery propels 1Q net profit to RM281mil

KUALA LUMPUR: Sime Darby Bhd posted a net profit of RM281mil in the first quarter of its financial year ended Sept 30, 2020, 14.2% higher than RM246mil in the previous corresponding quarter on strong growth in the group's motor division, especially in China.

Revenue in the quarter rose 14.8% to RM10.9bil while profit before interest and tax climbed 17.6% year-on-year to RM447mil.

“Our solid first quarter results were fuelled by China’s economic recovery.

"Our operations in Greater China performed exceptionally, growing profits by more than 70% for motors and over 30% for industrial during the quarter," said Sime Darby group CEO Datuk Jeffri Salim Davidson.

Meanwhile, the motors division made a recovery with most markets seeing increased profits due to the easing of restrictions that facilitated consumer spending.

However, lower coal prices in the industrial division and a cut back in mining operations resulted in lower equipment deliveries and parts sales.

“While it is an encouraging start to FY2021, we are mindful of the ever-present risk of the resurgence of Covid-19 that could adversely impact the global economy and our prospects ahead.

"We remain focused on executing our strategies and managing efficiency in equal measure,” said Jeffri.

He added that the board is cautiously optimistic that the group's financial performance for the financial year ending June 30, 2021, would be satisfactory based on the year-to-date results.

However, he noted that the impact of the coronavirus outbreak in the remaining months of the year cannot be accurately estimated at this juncture due to uncertainties over the timing of the vaccine administration and the possible risk of a resurgence in Covid-19 cases.
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Sime Darby , motor , industrial


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