Sime Darby makes strong start to FY24 on industry division growth

KUALA LUMPUR: Sime Darby Bhd made a strong start to its 2024 financial year (FY24) but will not be resting on its laurels as it remains cognisant of the risks ahead against the backdrop of a subdued global economic outlook.

The group will continue to rely on its strengths and stay focused on delivering its Strategy Blueprint, said group CEO Datuk Jeffri Salim Davidson.

Meanwhile, he said the group is also highly optimistic over the purchase of the 61.2% stake in UMW Holdings Bhd from Permodalan Nasional Bhd.

"It will help to broaden our earnings and allow us to capitalise on the mass volume segment, while unlocking further value by leveraging our proven strengths and capabilities in the automotive sector," he added.

Sime Darby kicked off FY24 with a first quarter net profit of RM589mil, which was nearly three times the net profit of RM207mil recorded in the previous-year quarter.

The group's basic earnings per share rose to 8.6 sen from 3.1 sen in the comparative period.

Revenue also picked up over the quarter to RM13.98bil from RM12.18bil in 1QFY23.

According to Jeffri Salim, the industrial business in particular saw very strong growth with a 65.7% jump in profit before interest and tax (PBIT) during the quarter.

"This was primarily due to higher demand for product support and the positive contribution from Onsite, a distinguished market leader in providing equipment rental solutions to clients across diverse industries in the Australian market," he said.

Meanwhile, the motors division turned in PBIT growth of 15.3% to RM203mil.

This was despite a continued slowdown in China that resulted in lower profit margins at the Chinese mainland operations.

There was also a gain of RM251mil on the disposal of Malaysian Vision Valley land to Sime Darby Property Bhd.

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