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Malaysia's Sime Darby Q2 profit down 22% on low commodity prices
[KUALA LUMPUR] Malaysia's Sime Darby Bhd, the world's largest palm oil planter by land size, reported a 22 per cent drop in second-quarter net profit as weak commodity prices and consumer demand hit its plantations and industrial businesses.
Net profit declined to 273.3 million ringgit (S$90.8 million) from 437.4 million ringgit in the second quarter a year ago, while revenue rose to 11.83 billion ringgit versus 10.74 billion ringgit.
"The numbers reflect the challenging business environment that the group operates in," Chief Executive Mohd Bakke Salleh said in a statement. "The mining sector downturn and slowing growth in China continue to significantly impact the Industrial Division while consumer-driven businesses remain tested by bearish sentiment."
Mr Salleh also said lower crude palm oil prices had weighed down the earnings contribution of the plantation division.
Sime Darby's shares were trading 2.9 per cent lower ahead of the earnings announcement, underperforming the benchmark stock index's 0.6 per cent.