Trailer Magazine

Sime Darby’s Industrial Business lifts FY2019 profits

  • Posted on Monday 2nd, September 2019.

Malaysian trading conglomerate, Sime Darby Berhad, reported a net profit of 948 million MYR ($335.058 million AUD) for the financial year ended 30 June 2019, a 53.4 per cent jump from its previous financial year, driven by the strong performance of the Industrial Division on the back of a recovery in the mining and construction sectors in Australia and construction, specifically, in China.

Revenue for the financial year stood at 36.2 billion MYR ($1.279 billion AUD), beating FY2018’s results by 6.9 per cent, while profit before interest and tax (PBIT) was 28.8 per cent higher year-on-year (YoY) at 1.38 billion MYR ($487.585 million AUD). Excluding one-off gains, impairments and provisions, the Group’s core PBIT for FY2019 rose 22.1 per cent to 1.5 billion MYR ($530 million AUD) YoY, while its core net profit saw a 13.8 per cent hike YoY to 950 million MYR ($335.6 million AUD).

The Group’s positive results in key markets for the Industrial Division helped compensate for the softness in the Motors Division’s profits in Singapore, Hong Kong and Australia.

“Our Industrial operations in Australia and China were the clear winners in FY2019, as we benefitted from an upcycle in the mining and construction sectors, while growth in the Motors Division decelerated in an environment of intense competition,” said Sime Darby Berhad Group CEO, Dato’ Jeffri Salim Davidson.

“Early signs show that the Industrial Division will continue to take the lead in FY2020.

“However, the pipeline of new models coming in from our stable of automotive brands are expected to generate some excitement in the market,” he said.

Davidson also commented on the 12 months of FY2019 compared with FY2019.

“We made meaningful strides in business expansion for FY2019,” said Davidson.

“Our Industrial Division acquired Australia’s Heavy Maintenance Group Pty Ltd, an industrial equipment specialist that complements and adds capacity to Austchrome, our existing cylinder refurbishment and chroming business, as part of our strategy to provide value-added services to our customers.

“We also expanded our Motors operations in China by adding two new dealerships to our stable. Our continuing efforts to streamline our portfolio led to the divestment of our Global Services Centre to DXC Technology.

Our acquisition of New Zealand’s Gough Group Limited, expected to be completed by September 30, would place us on a strong footing to build on our strengths and to continue delivering additional profits to our shareholders. The transaction provides a rare opportunity for us to acquire one of Caterpillar’s oldest dealerships, reinforcing Sime Darby Industrial’s leadership position in Asia Pacific. Gough Group’s transport and material handling business, which represents premium global brands in New Zealand and Australia, is complementary to Sime Darby Motors’ existing commercial truck business in New Zealand and opens up new growth avenues for us in the region.”

The Industrial Division achieved a 30.4 per cent increase in PBIT YoY in FY2019 at 798 million MYR ($281.9 million AUD), brought in by higher margins from product support, as well as improved contribution from equipment deliveries in key markets of Australia, China and Singapore. Excluding one-off items, its core PBIT stood at 817 million MYR ($288.6 million AUD), representing an 88.2 per cent hike YoY. 

The Motors Division reported a PBIT of 628 million MYR ($221.8 million AUD) in FY2019, 15.7 per cent higher YoY. The previous corresponding period included 199 million MYR ($70.2 million AUD) in losses from its Vietnam operations. Stripping out one-off items, the Motors Division’s core PBIT is 11 per cent lower YoY, due to lower margins as a result of overall competitive market conditions, mainly in Singapore and Hong Kong. This was partly mitigated by higher sales and profits in Malaysia following the zero-rating of the Goods and Services Tax in July and August 2018, and higher contribution from sales of luxury cars in China.

The Logistics Division reported a PBIT of 2 million MYR ($706,376 AUD) compared with 74 million MYR ($26.1 million AUD) in the previous year. The lower PBIT was due to our share of loss and impairment for Weifang Port Services (a 37 per cent owned joint venture) of 119 million MYR ($42 million AUD). The impairment was mainly due to lower throughput projected as a result of trade tensions and uncertainties surrounding the port consolidation exercise.

(Image: Sime Darby Berhad Group CEO, Dato’ Jeffri Salim Davidson.)

  • Latest Issue

  • Click here to join the CRT network today
  • Keep up to date on the latest news and developments in the commercial road transport industry. Sign up to CRT News today to receive a FREE weekly E-newsletter delivered straight to your inbox.

© Copyright Prime Creative Media. All rights reserved.

Find us on Google+