Sime Darby net profit falls 12.3pc to RM207m in Q1

KUALA LUMPUR, Nov 24 — Sime Darby Bhd’s net profit fell by 12.3 per cent to RM207 million in the first quarter (Q1) ended Sept 30, 2022 from RM236 million a year ago, mainly due to lower profit from its motors segment, higher finance costs and losses from discontinuing operations.

The group’s revenue for Q1, however, was 14.5 per cent higher at RM12.18 billion, compared with RM10.64 billion a year ago.

Group chief executive officer Datuk Jeffri Salim Davidson said its industrial business has seen strong growth with a 35 per cent jump in Q1.

This was due mainly to higher demand for parts with customers’ backlogged maintenance work coming in and higher parts prices in Australasia.

“We also saw a positive contribution from Salmon Australia, an equipment rental business we acquired just over a year ago.

“This is a testament to our value creation plan, which continues to bear fruit as we strengthen our industrial division,” he said in a statement.

Jeffri said the motors division was impacted by market sentiment, which resulted in lower margins for higher volume.

However, improved results from Malaysia and Australasia were able to help mitigate the impact of China.

He said Malaysia’s performance was supported by ongoing deliveries of cars ordered during the sales tax holiday, while Australasia’s return to normal operations delivered improved results, compared to the previous corresponding quarter which was impacted by Covid-19 restrictions.

On prospects, he said the financial year of 2023 (FY2023) is expected to be a challenging year.

“Looking at positive prospects ahead, for motors, we will continue delivering the backlog of orders in Malaysia until Q3 of FY2023.

“We will continue to invest and grow our sales network for both the motors and industrial businesses as well as actively exploring merger and acquisition opportunities to extend our core businesses reach,” he noted. — Bernama