PETALING JAYA: Sime Darby Bhd reported a lower net profit of RM236mil for the first quarter ended Sept 30, 2021 (Q1 of financial year 2022 or FY22) as its industrial operations in China absorbed the impact of a slowdown in construction activities in the quarter.
Revenue for Q1FY22 was 1.9% lower at RM10.67bil, compared with RM10.88bil in Q1 FY21.
“China is a big part of the group’s revenue and profits, and the industrial division was impacted by the slowdown in infrastructure spend in China. Our motors’ operations in China on the other hand, continued to deliver a strong set of results with higher sales of super-luxury vehicles.
“The industrial and motors operations in all other markets performed well considering that many were under some form of movement restriction during the first two months of the quarter. “We are conscious of the economic and pandemic related headwinds that could impact our performance in our markets across the Asia Pacific region. Nevertheless, we remain positive on long-term prospects in the region, given that we have built strong fundamentals and fired up our businesses to remain resilient and well-positioned to capitalise on growth opportunities,” said Sime Darby Bhd’s group chief executive officer Datuk Jeffri Salim Davidson in a statement yesterday.
He added that the group had completed the acquisition of Australia’s Salmon Earthmoving Holdings in October.
“This will not only contribute between RM150mil and RM180mil to the group’s revenue for FY22, but also ensures our diversification into the construction rental sector and into a new market in New South Wales, Australia.
“We will continue to look for further growth opportunities and to manage the efficiency of our operations in order to mitigate any impact brought upon by external factors,” he said.
The Industrial division’s profit before interest and tax (PBIT) for Q1FY22 was down 18.4% to RM160mil. This was mainly due to a steep decline in profit from its China operations, which faced lower equipment deliveries and rental revenue following the slowdown in China’s construction activities.
Industrial Australasia’s PBIT was 3% higher for the quarter on higher equipment revenue as compared with Q1FY2021, despite reduced margins from parts sales.
The Motors division’s PBIT for Q1FY22 improved slightly as Motors China, excluding Hong Kong and Macau, reported a 15% higher PBIT on higher revenue from the sale of super luxury vehicles, and higher profits in Malaysia.