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Malaysia's Sime Darby Q1 profit up 37% on motors unit's strength
[KUALA LUMPUR] Malaysian conglomerate Sime Darby Berhad reported a 37 per cent rise in first-quarter net profit as higher sales of vehicles at home and in Singapore boosted its motors unit and helped offset sluggishness in its plantation business.
Sime Darby, the world's largest palm oil planter by land size, posted a profit of 443 million ringgit (S$143 million) for the quarter ended Sept 30, compared to 323 million ringgit in the year-ago quarter.
The motors unit of the conglomerate, which distributes and assembles vehicles, and represents 30 brands, showed improved performance of the mass vehicle segment in Malaysia and the luxury segment in Singapore, it said in a statement.
That drove gains of 186 per cent and 44 per cent in profit before interest and tax, respectively, in the two countries' motors business, it said.
Overall, the motors business saw a 53 per cent jump in profit before interest and tax to 130 million ringgit.
The plantation division's profit before interest and tax fell 9.6 per cent to 273 million ringgit, mainly due to lower fresh fruit bunch production, lower oil extraction rate and lower crude palm oil sales volume, it said.
"The lingering effects of the Super El Nino continued to impact production, particularly in South Kalimantan and Sabah," Sime Darby said of the weather event's effect on palm oil output.
The company's revenue for the quarter was flat at 10.1 billion ringgit compared with 10.2 billion ringgit in the year-ago period.
The conglomerate also set a net earnings target of 2.2 billion ringgit and a return on average shareholders' equity target of 6.4 per cent for the financial year ending June 30, 2017.