KUALA LUMPUR: Sime Darby Bhd's net profit leapt two and a half times to RM1.32 billion in the first quarter ended September 30 2017 from RM522 million previously, thanks to higher palm oil prices and property sales.
This was the group’s last quarterly report under the current form, Sime Darby president and group chief executive Tan Sri Mohd Bakke Salleh said.
“Our final quarterly operation under the current structure has performed well overall,” said Bakke, who will lead Sime Darby Plantation.
Group revenue for the quarter stood at RM8.14 billion against RM6.93 billion a year ago.
Sime Darby, Malaysia’s oldest conglomerate, will see separate listings of its plantation and property divisions - Sime Darby Plantation Bhd and Sime Darby Property Bhd - on November 30.
Following the demerger, Sime Darby Bhd's main businesses will be industrial, motors and logistics, focusing mainly in the Asia Pacific region.
Sime Darby chief financial officer Datuk Tong Poh Keow, at the media briefing yesterday, revealed the indicative price of the three entities.
Upon its listing, Sime Darby Plantation shares are likely to be priced at around RM5.43 to RM6.15 with a market capitalisation of between RM36.93 billion and RM41.82 billion.
Sime Darby Property shares are likely priced at around RM1.45 to RM1.72 with between RM9.85 billion and RM11.70 billion in market capitalisation.
The smaller Sime Darby’s share price is likely to be around RM1.18 and RM2.17 with a market capitalisation of between RM8.00 billion and RM14.78 billion.
The group’s shares closed unchanged at RM9.00 yesterday.
Elaborating on the interim results, Bakke said the plantation division had benefitted from higher fresh fruit bunch harvest, which was supported by higher crude palm oil prices.
The recognition of share of profits from the Battersea development project, meanwhile, enhanced the property division’s performance.
"We are also able to report higher heavy equipment deliveries in Australia and China. We also recognised gains on sale of properties and investments and reversal of depreciation and amortisation of discontinuing operations,” Bakke said.
In the first quarter, its plantation arm posted RM1.28 billion pre-tax profit, an almost four-fold increase from RM329 million a year ago.
The drastic jump was due to gain on land sale to Sime Darby Property, higher earnings from the upstream operations, a one-off reversal of accruals and lower finance costs.
Sime Darby Plantation’s downstream business saw pre-tax profit slid five per cent to RM70 million from RM74 million previously.
It was dragged by lower sales and costlier feedstocks at its palm oil refineries in Malaysia and Europe but partially mitigated by the favourable showing of its Indonesian refinery.
Sime Darby Property's first quarter pre-tax profits amounted to RM420 million, more than double the RM184 million posted a year ago.
This was due to RM87 million profit contribution from the Battersea Power Station redevelopment, higher contribution from the Elmina West and Elmina East townships, and a project on the Australian Gold Coast known as Serenity Cove.
There were also RM278 million and RM41 million gains from the sale of its 40 per cent stake in Seriemas Development Sdn Bhd and 100 per cent stake in Malaysia Land Development Company Bhd.
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