KUALA LUMPUR (Aug 25): Sime Darby Bhd's net profit for the fourth quarter ended June 30, 2021 (4QFY21) improved 19.2% to RM211 million from RM177 million a year ago. Earnings per share for 4QFY21 came in higher at 3.1 sen compared with 2.6 sen a year earlier.
The net profit growth was supported by higher revenue which expanded 28.6% to RM11.34 billion from RM8.82 billion a year ago.
The company attributed the improved earnings to the strong performance by its motor division.
The group declared a second interim dividend of eight sen per share and a special dividend of one sen per share for 4QFY21. These brought the total dividend payout for the financial year ended June 30, 2021 (FY21) to 15 sen per share, compared with 10 sen in FY20.
For FY21, Sime Darby saw its cumulative net profit jump 73.8% to RM1.43 billion from RM820 million in the previous financial year. Revenue increased by 20.44% to RM44.48 billion from RM36.93 billion a year ago.
The better performance was boosted by its motor division, said Sime Darby, particularly from its operation in China.
Notably, the motor division was the largest revenue contributor to the group.
In a filing with Bursa, Sime Darby said that the profit before interest and tax (PBIT) for the motor segment increased to RM1.05 billion, up 82.9% for FY21, as the group saw higher profits across all regions compared with in the previous financial year, when it was adversely impacted by movement restrictions due to the Covid-19 pandemic.
The group said that the RM1.05 billion PBIT included dividend income of RM113 million, goods and services tax refund of RM39 million, gain on disposal of properties amounting to RM38 million and impairment of leasehold land of RM89 million. Excluding these items, segmental profit increased by 97.7%.
In a press statement, Sime Darby group chief executive officer Datuk Jeffri Salim Davidson said that the motor division performance saw demand for its BMWs and super-luxury marques being extremely strong, especially in China.
"With the travel restrictions, many of our customers are unable to travel and are spending their excess cash on luxury items domestically," he said.
However, both of its industrial and healthcare divisions experienced lower earnings.
The profit generated by the industrial division fell by 6% to RM909 million, mainly due to a 19.3% decline in PBIT from the China operation as margins were affected by strong competition despite higher revenue recognised.
Meanwhile, its healthcare division saw lower segmental profit of 61.5% to RM15 million largely due to dividend withholding tax and write-down of deferred tax assets in the Ramsay Sime Darby Healthcare group during the year.
Going forward, the group sees FY22 to be a challenging financial year.
"The impact of the ongoing Covid-19 pandemic and trade tensions is not really something we can estimate. However, our strong financial position and diversified operations should help us get through these challenges and place us in a good position for growth, once prospects and business sentiment improve," said Jeffri, noting that the group was in a net cash position of RM646 million as at June 30.
As at the lunch break, Sime Darby's shares were unchanged at RM2.25, giving a market capitalisation of RM15.3 billion.