China motors division powers Sime Darby 3Q net profit

Sime Darby reported solid sales performance in motors China.

KUALA LUMPUR: Sime Darby Bhd’s net profit jumped 161% to RM300mil in the third quarter ended March 31,2021 from RM115mil a year ago underpinned by the strong performance of the motors division, particularly in China.

In a statement on Tuesday, it reported its revenue increased by 30.7% to RM11.02bil from RM8.43bil a year ago. Earnings per share rose to 4.4 sen from 1.7 sen.

“The group’s profit before interest and tax (PBIT) for the quarter grew by 75% to RM463mil, as compared to 3QFY20.

“This was due to solid sales performance in motors China, where PBIT more than tripled to RM125mil with higher revenue and margins, ” it said.

Its group CEO Datuk Jeffri Salim Davidson (pic, below) said the motors division continued to perform well in the third quarter of FY2021 on the back of sustained strong demand for luxury cars, especially in the key markets of China and Australasia.

“Restrictions on international travel have diverted domestic spending to premium and luxury brands, which have benefitted us. On the other hand, we saw a softening in demand for equipment and parts in our industrial division’s operations in Australia.

“As part of our strategy to grow our healthcare business, our joint venture company Ramsay Sime Darby Health Care had recently completed the acquisition of Manipal Hospital in Klang, Selangor.

“We also concluded the sale of our stake in Eastern & Oriental Bhd in line with our non-core asset rationalisation plan. This will allow us to focus our efforts on our core divisions and to deliver maximum value to our stakeholders, ” he said.

Jeffri Salim said Sime Darby was also very mindful of the formidable challenges that the Covid-19 pandemic had inflicted on its staff and on our operations, and will continue to place its employees’ safety and wellbeing above all other considerations.

In the nine months, Sime Darby reported an 89% increase in net profit to RM1.214bil from RM643mil in the previous corresponding period. Its revenue increased to RM33.14bil from RM28.11bil.

Sime Darby said excluding the RM272mil in gains from the sale of its stake in Tesco Malaysia, the group saw a 47% increase in its net profit for the period, mainly attributable to the stellar performance of its motors division.

This achievement was supported by an 18% improvement in the group’s revenue to RM33.1bil for the period.

The motors division saw its PBIT almost double to RM755mil, which was contributed mainly by the robust performance of its China, Australasia and Singapore operations.

However, the Industrial division saw its PBIT decrease by 13% to RM663mil, mainly due to a decline in profits from its Australasia operations, as a result of lower revenue from equipment and parts sales.

As for the China operations, there was an 8% increase in PBIT due to higher revenue, though margins for the period were weakened due to strong competition in the segment.

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