KUALA LUMPUR: Sime Darby Bhd’s net profit eased 2.58 per cent to RM528 million in the first-half of the year ending June 30 2020 (FY20) from RM542 million previously.
In an exchange filing today, SDB said the lower earnings were dragged by a deferred tax credit of RM129 million from change in real property gains tax rates.
Sime Darby’s revenue for the period rose 7.6 per cent to RM19.66 billion from RM18.27 billion contributed by strong growth in the group’s industrial division in Australasia and China, and improved margins at the group’s BMW China operations.
Group chief executive officer Datuk Seri Jeffri Salim Davidson said its performance in Greater China including Hong Kong, Macau and Taiwan, was up significantly year-on-year, with the industrial division’s regional operations expanding by 40 per cent.
The motors division’s Greater China business also posted more than doubling profits.
“However, we are cautious about the prospects for the second-half against the backdrop of the Covid-19 outbreak. We are hopeful that the strong first half will help cushion the impact,” he said in a statement today.
He said it was still too early to predict the full impact of the outbreak on the group’s operations, particularly for China and Singapore.
“But we are actively managing the situation, with the safety and wellbeing of our employees, customers and visitors to our facilities being our top priority. We remain hopeful that the outbreak will be contained in the near future,” he added.
For the second-quarter (Q2), Sime Darby’s net profit decreased 11.04 per cent to RM282 million from RM317 million, while revenue increased 8.39 per cent to RM10.21 billion from RM9.42 billion recorded in the same period a year ago.
Sime Darby said coronavirus outbreak in China was likely to have a significant impact on global economic activity.
“It has already impacted consumer sentiment in China and is likely to cause further production disruptions. As the group largely operates in the Asia Pacific and has a significant presence in China, the coronavirus outbreak would have a significant impact on the group’s operations.”
On the group’s industrial equipment and transport of cargo in China, Sime Darby said disruptions to vehicle and equipment supply chains may also affect sales in other countries.
“The impact of the coronavirus outbreak cannot be accurately estimated at this juncture. If the coronavirus outbreak is not contained in the short term, it would have a significant impact on the Group’s performance for FY20.”
However, it said its strong financial performance in the first half would help cushion the impact.
Sime Darby declared an interim dividend of 2.0 sen per share for FY20, payable on May .