Sime’s Q4 earnings slip 9pc

KUALA LUMPUR: Sime Darby Bhd’s earnings slipped nine per cent to RM1.19 billion in the fourth quarter ended June 2014 from RM1.31 billion a year ago as the conglomerate braved challenges in the muted global economy.

In its filing to the stock market yesterday, the group noted its revenue had similarly dipped by two per cent to RM12.51 billion from RM12.75 billion a year earlier.

Sime Darby president and group chief executive Tan Sri Mohd Bakke Salleh attributed the lower earnings to “challenging global business environment” with profits of the group’s three divisions dropping between 45 and 73 per cent.

As early as nine months ago, he had forewarned investors that Sime Darby’s earnings are likely to be dented by slowdown in the Australian mining sector.

In a media briefing, here, yesterday, Bakke pointed out that Sime Darby’s plantation profits jumped 65 per cent to RM657.7 million from RM399.4 million posted a year ago. This was on the encouraging crude palm oil (CPO) prices averaging at RM2,474 per tonne. Since then, CPO prices have been sliding.

Asked on the price forecast, he said prices in the immediate term are likely to trade rangebound at current level of RM2,000 per tonne.

Its industrial division’s lower fourth quarter profit ended June 2014 was due to fewer equipment deliveries and product support sales in Australia’s mining sector. The property division did better due to higher sales from its City of Elmina and Isolar Project, while its energy and utilities business posted lower profit due to additional provisions made for previous oil and gas projects.

On the group’s plan to take its automotive arm public, Bakke said the initial public offering is scheduled in the first half of 2015 but it would still depend on market conditions.

Meanwhile, when asked on progress of the exclusive talks to buy up Kulim Bhd’s 49 per cent stake in London-listed New Britain Palm Oil Ltd, Bakke said, “we’re only mid-way into the talks. So, it is still early days to comment on pricing. We can only reveal such sensitive information when the time is right.”