"The Covid-19 lockdown in China is still impacting our business. It may be quite a difficult year [for FY23], and it’s quite hard to achieve the results we want.” — Sime Darby group CEO Datuk Jeffri Salim Davidson
KUALA LUMPUR (Aug 17): Sime Darby Bhd expects financial year ending June 30, 2023 (FY23) to be tough in the face of continuing headwinds from the Covid-19 pandemic, rising inflation and supply chain issues, said group chief executive officer Datuk Jeffri Salim Davidson.
"I see more headwinds than in the past because inflation is 'rearing its head', interest rates are rising and borrowing costs are also rising, which may dampen consumer sentiment," he said at Sime Darby's financial results briefing for the fourth quarter ended June 30, 2022 (4QFY22) held virtually on Wednesday (Aug 17).
In addition, Jeffri said, supply chain issues have not yet been fully resolved, which could affect the group's future performance.
"The Covid-19 lockdown in China is still impacting our business. It may be quite a difficult year [for FY23], and it's quite hard to achieve the results we want."
On potential mergers and acquisitions, Jeffri said the diversified group is always looking for opportunities to expand its motor division.
"We are always looking for opportunities to acquire companies to expand our motor business, especially in China and other regions, but I can't disclose more on that," he said.
Sime Darby's net profit for 4QFY22 grew 31.75% to RM278 million from RM211 million a year earlier, mainly due to a higher profit from the industrial division and lower tax expenses.
Quarterly revenue fell 3.97% to RM10.85 billion in 4QFY22 from RM11.3 billion in 4QFY21.
The group ended FY22 with a lower net profit of RM1.1 billion, down 22.6% from RM1.43 billion a year ago, when it made a one-off gain of RM272 million on the divestment of the group's 30% stake in Tesco (Malaysia) Sdn Bhd (now known as Lotus's) in the previous year.
Revenue was also lower at RM42.5 billion in FY22 compared with RM44.3 billion in FY21. The group's total borrowings for FY22 rose to RM5.03 billion from RM3.73 billion in FY21.
The conglomerate declared a second interim dividend of 7.5 sen per share for 4QFY22, to be payable on Sept 30. This took its total dividend payout for FY22 to 11.5 sen per share or RM783 million, representing a payout of 71% of FY22 net profit.