Sime Darby Reports 66% Increase In Half-Year Operating Profit
Press Release
Strong growth in plantation
Turnaround in motor division
KUALA LUMPUR, 27 February 2008 – Sime Darby Berhad’s operating profit before unusual items surged 66 per cent on the back of strong CPO prices and the turnaround of the Motor operations.
The strong showing was on the back of revenue of RM16.3 billion, which grew by 22 per cent. Pre-tax profit increased by 25 per cent to RM2.2 billion for the half-year period ended 31 December 2007.
Commenting on the results, Dato' Seri Ahmad Zubir Murshid, President & Group Chief Executive of Sime Darby said that "I am pleased with the results considering the challenges of integration over the past year".
The highlight of the Group's strong showing was the performance of the Plantation Division. The division's operating profit before unusual items doubled to RM1.5 billion, mainly due to strong CPO prices. The Group's Motor Division also rebounded from a loss of RM2.3 million to a profit of RM126.5 million, due to the turnaround of the Malaysian operations and improvement in its international operations.
The current financial year is a restructuring year for Sime Darby. The integration process which was completed in January 2008, lays the foundation for the realisation of synergies post-merger.
"Over the past year we have worked hard to ensure that our integration efforts were executed efficiently. We are confident that this hard work will pay off and we will be able to deliver the targeted RM400 million-RM500 million synergies by FY09/10. The challenge ahead is for Sime Darby to continue growing its other core businesses into global industry leaders. We have the capacity to do so, given our sizeable balance sheet and low gearing, post-merger,'' Dato' Seri Ahmad Zubir added.
The Group is expected to continue delivering strong results in second half of FY07/08 with CPO prices reaching new heights.
“Our existing business model provides an excellent hedge against the vagaries of the global economy especially in the current sub-prime related market environment. Moving forward, the Group is well-positioned to continue on a steady growth path,'' Dato’ Seri Ahmad Zubir noted.