Trailer Magazine

Sime Darby’s Industrial Division reports strong performance

  • Posted on Thursday 15th, August 2019.

Malaysian trading conglomerate, Sime Darby Berhad, which recently announced its proposed purchase of Gough Group, reported a net profit of 222 million MYR ($78.2 million AUD) for the quarter ended 31 March 2019 – a 64.4 per cent increase year-on-year.

Revenue for Q3 FY2019 was 3.3 per cent higher year-on-year at 8.6 billion MYR ($3 billion AUD), while profit before interest and tax (PBIT) surged 47.1 per cent year-on-year to 331 million MYR ($116.6 million AUD).

Excluding one-off gains, impairments and provisions, the Group’s core PBIT for the quarter rose 28.1 per cent to 337 million MYR ($118.7 million AUD) year-on-year while its core net profit saw a 32.6 per cent year-on-year hike to 228 million MYR ($80.3 million AUD).

For the nine-month period ended 31 March 2019 (9M FY2019), the Group’s continuing operations posted a 67.9 per cent increase in net profit to 764 million MYR ($269.2 million AUD), from 455 million MYR ($160.3 million AUD) in the same period last financial year (9M FY2018). This was substantially due to the strong performance of the Industrial Division’s Australasian operations. Revenue for 9M FY2019 stood at 26.8 billion MYR ($9.4 billion AUD), representing a 6.3 per cent increase year-on-year.

“Our Australian Industrial business has once again provided strong earnings to support the Group, as we continue to benefit from improved trading conditions in the mining and construction sectors in Australia,” said Sime Darby CEO, Dato’ Jeffri Salim Davidson.

“We expect these improved conditions to continue, as miners increase expenditure for both equipment replacement cycles and expansion,” he said.

In 9M FY2019, the Group benefitted from the upturn in the Australian mining industry, which boosted equipment deliveries and contributed to higher margins from equipment and parts sales for the Industrial Division. This provided some respite from the headwinds experienced by the Motors Division due to the challenging automotive markets in China and Singapore.

The Industrial Division achieved a 22.3 per cent increase in PBIT year-on-year in 9M FY2019 at 575 million MYR ($202.6 million AUD). Excluding one-off items, its core PBIT of 616 million MYR ($217 million AUD), representing a 102 per cent hike year-on-year. 

The Motors Division reported a PBIT of 352 million MYR ($124 million AUD) for 9M FY2019, 31.3 per cent higher year-on-hear. The previous corresponding period included 193 million MYR ($68 million AUD) in losses incurred in Vietnam. Stripping out one-off items, the Motors Division’s core PBIT is 18.2 per cent lower year-on-year, as the result of competitive market conditions in China and a weaker vehicle sales environment in Singapore and Australia.

“The Motors Division performed well for the first nine months of financial year 2019 despite increasing competition in most markets, selling more units of BMW and Super Luxury vehicles in China, and BMW and Ford vehicles in Malaysia,” said Davidson. “We are confident that new model launches, particularly those in the premium segment, will spur growth despite the tough market environment.”

The Logistics Division saw an 88.5 per cent increase in its PBIT, mainly due to a gain from the disposal of Weifang Water. Excluding this, the Division’s core profit saw a 39.3 per cent dip year-on-year, mainly from lower contribution across the Division following the disposal.

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

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