Sime Darby's FY2020 net profit, revenue rise amid Covid-19 crisis

KUALA LUMPUR: Sime Darby Bhd posted RM820 million net profit for the year ended June 30 2020, amid challenging market conditions brought about by the Covid-19 pandemic in the second half of the financial

year.

Sime Darby saw a 9.5 per cent growth in net profit from underlying business operations (core net profit) of RM1.04 billion, compared to RM950 million in the last financial year.

Strong performance of the group's industrial division in Australia and China, and robust BMW sales in its motors divisions' operations in China in the first half of the year helped mitigate the impact of the pandemic and the impairments made.

Group revenue was largely maintained at RM36.93 billion, compared with RM36.16 billion in 2019.

"We had a solid first half with both the industrial and motors divisions reporting very strong results," Sime

Darby group chief executive officer Datuk Jeffri Salim Davidson said in a statement today.

"The movement restrictions from February to May severely disrupted our operations in the second half of the year but, fortunately, our businesses have seen a strong recovery in sales after movement restrictions were eased."

Jeffri added that the diversity of its operations, both in terms of the different market segments it served and in terms of geography, worked to its advantage.

"Our Caterpillar distribution business in Australia performed particularly strongly and covered for the shortfall in other parts of the business affected by lockdowns.

"The resilient operating performance together with our efforts to improve working capital have resulted in a significant increase in the group's operating cash flow from RM1.35 billion last year to RM3 billion this year.:

The strong operating cash flow and relatively low gearing ratio of 0.26x placed the group in a good position to handle the uncertain times ahead, he added.

Sime Darby made impairments of over RM200 million for the year mainly from Weifang Port Services Co, and its investment in Eastern & Oriental Bhd.

Sime Darby's net profit for the fourth quarter was 3.8 per cent lower year-on-year at RM177 million.

A second interim dividend of seven sen per share and special dividend of one sen per share is declared for the financial year.

Together with the earlier interim dividend of two sen per share, the total dividend for the year is 10 sen per share.