Sime's Q1 net surges 64pc to RM1.07b

Net profit leaped to RM1.07 billion in the quarter ended September 30 against RM654.7 million in the same period last year, mainly thanks to higher crude palm oil prices

Read more: Sime's Q1 net surges 64pc to RM1.07b http://www.btimes.com.my/articles/20111126002034/Article/#ixzz1epCe4u5T

Kuala Lumpur: Sime Darby Bhd, the world's biggest publicly-traded palm oil producer, registered a 64 per cent jump in its first-quarter net profit, mainly thanks to higher crude palm oil (CPO) prices as well as demand for its heavy equipment. Net profit leaped to RM1.07 billion in the quarter ended September 30 against RM654.7 million in the same period last year. Revenue increased by 28 per cent to RM11.1 billion. Sime Darby expects a lower net profit for the year ending June 30 2012, due mainly to possible softening of CPO prices. In its target headline key performance indicators (KPIs) for the current financial year, it expects net profit to be around RM3.3 billion. Based on analysts' earnings estimates by Bloomberg, Sime Darby is expected to post a net profit of about RM3.8 billion for the full year, an increase of 3.8 per cent against RM3.66 billion posted during the 2011 financial year. Sime Darby said the KPIs were also based on the assumption that CPO prices would be slightly below the RM2,800 level."When we talk about forecasting, it is always better to be conservative ... In our business, weather plays a key role in determining the prices of commodities. "Nevertheless, we have more than seven months to go. We will be happy if the price stayed above RM3,000 a tonne. It's a bonus," said president and group chief executive Datuk Mohd Bakke Salleh. During the quarter, the average CPO prices were at RM2,946 per tonne, against RM2,511 per tonne in the same quarter last year. There was also an increase of fresh fruit bunches (FFB) by over eight per cent. Sime Darby's industrial segment posted an operating pro-fit of RM330 million in the first quarter, up 42 per cent from a year earlier, boosted by its strong mining business in Australia. The Malaysian operations were supported by its construction and logging businesses. The group's property and automotive segments' operating profits grew three per cent and 2 per cent to RM60.5 million and RM154.7 million respectively. Operating profit from its energy and utility unit fell six per cent to RM47.3 million, due partly to power plant downtime in Thailand. Its healthcare and other units' operating profit registered 38 per cent growth to RM11.9 million, partly due to higher profit contribution from its investment in Tesco.