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NEWS ADMIN

Mahamad Rodzi Abdul Ghani

DATE

01/06/2001

NEWS PROVIDER

Mahamad Rodzi Abdul Ghani

NEWS SOURCE

NULL

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HEADLINE

Sime records RM470.5m net profit for 9-month perio
Sime records RM470.5m net profit for 9-month period

31 May 2001 (NSTP) - SIME Darby Group, one of Malaysia's biggest andoldest conglomerates with interests ranging from rubber to properties,recorded a 13 per cent drop in net profit to RM470.5 million for the threequarters ended March 31 2001.

Earnings per share also shed 13 per cent to 20.2 sen.

Group turnover, however, increased by 14 per cent to RM8.98 billion fromRM7.86 billion in the corresponding period.

Group chief executive Tan Sri Nik Mohamed Yaacob said motor vehicledistribution was the star performer among the group's major divisions,registering turnover of RM3.01 billion from higher sales of BMW and Fordmotor vehicles in Malaysia, Hong Kong and Singapore.

Tractors Malaysia Holdings Bhd, which distributes BMW and Ford makes, sawnet profit rise more than 100 per cent during the nine-month period toRM81.25 million from RM37.89 million before.

This was achieved on the back of higher turnover of RM1.15 billion.

Earnings per share rose 115 per cent to 25.1 sen.

Sime Darby's Hong Kong and Singapore operations, also heavy on the motorvehicle distribution business, recorded profits of RM95.4 million andRM127.7 million respectively.

The tyre and related-product division maintained its profitabilityfollowing good demand.

Sime Darby's listed subsidiary DMIB Bhd posted a net profit of RM14.83million on a back of a lower turnover of RM430.27 million.

Pre-tax profit stood higher at RM20.49 million against RM19.07 millionpreviously, while earnings per share dropped to 4.5 sen from 5.5 senbefore.

The property division also recorded profit as demand for residential unitsin Putra Heights and Ara Damansara near Kuala Lumpur remained firm.

Sime UEP Properties Bhd recorded a lower net profit of RM54.82 millionfrom the corresponding period's RM70.19 million, on the back of higherturnover of RM218.98 million.

Earnings per share stood at 13.5 sen from 17.3 sen before.

The plantation sector's performance fell due to weaker crude palm oil(CPO) and palm kernel prices, which averaged RM912 and RM554 per tonnerespectively.

Nik Mohamed said the average prices for CPO and palm kernel in theprevious corresponding period were RM1,202 per tonne and RM1,052 per tonnerespectively.

The plantation sector's profit before interest and investment incomedropped by about 45 per cent during the period to RM65.4 million fromRM103.4 million previously.

Nik Mohamed said trade barriers imposed by China, India and Pakistan onthe import of edible oils from Malaysia also contributed to the drop.

"If these barriers are reduced, demand and prices of palm oil willautomatically improve.

"He further said to improve the sector's performance, Sime Darby plans toreduce production and costs.

"We are well on track to achieve 10 per cent reduction in production cost.

This will result in higher savings.

"He said the Malaysian operations' contribution to the group improved inline with the increased activities in oil and gas, particularly from SimeSemb-Corp Engineering, securing several job orders in the currentfinancial year.

The results also include profit of RM99 million (RM46 million last year)from Port Dickson Power.

Meanwhile, analysts contacted said Sime Darby's results were withinexpectations.

"The results are expected given the continuous drop in crude palm oil andpalm kernel prices," Alex Goh of TA Securities Bhd said.

Goh said a similar or slightly lower performance is expected for thecoming fourth quarter with major contributions likely to come from thedistribution of motor vehicles business.

Another analyst, however, said the motor vehicles sector may not be ableto repeat its performance given the expected slowdown in demand.

The analyst expected the motor vehicles distribution sector to contributeless than RM70 million to the group's profitability for the comingquarter.