KUALA LUMPUR (Feb 24): Sime Darby Bhd's (KL:SIME) net profit for the second quarter ended Dec 31, 2024 (2QFY2025) fell 86.7% year-on-year (y-o-y) to RM305 million from RM2.29 billion a year ago, as last year’s results were boosted by a one-off gain from the disposal of Ramsay Sime Darby Health Care.

Excluding the discontinued operations, profit from continuing operations grew 16.1% y-o-y to RM303 million, mainly due to the full-quarter contribution from newly acquired UMW Holdings Bhd, according to the group in a filing with Bursa Malaysia on Monday.

Revenue for the quarter rose 14.2% y-o-y to RM17.73 billion from RM15.52 billion, supported by higher contributions from the industrial and automotive businesses.

Sime Darby declared an interim dividend of three sen per share, and a special dividend of one sen per share, for FY2025.

During the quarter under review,  the UMW division contributed RM272 million in profit before interest and tax (PBIT), due to higher sales of Perodua vehicles. 

The industrial division recorded a PBIT of RM337 million, reflecting a marginal decrease of 4% after lower profits from Australasia operations, as a result of a weaker Australian dollar versus the US dollar, which were offset by higher contributions from the Malaysian and Singapore operations.

The motors division reported a reduced PBIT of RM118 million in 2QFY2025 due to lower vehicle sales in Malaysia and Australasia, offset by higher electric vehicle sales in Singapore.

For the first half ended Dec 31, 2024 (1HFY2025), net profit declined 61.6% y-o-y to RM1.11 billion, from RM2.88 billion previously. Revenue, however, increased 22% to RM35.99 billion from RM29.50 billion for 1HFY2024.

"Demand for the industrial division’s products and after-sales service from the mining industry in Australasia is expected to remain stable. However, the construction industry in China is expected to remain subdued," said Sime Darby.

Motors operations, particularly in China, face challenges from intense competition and cautious consumer sentiment. In Malaysia, car demand remains robust but is expected to dip compared to the record sales registered in 2024, with the Malaysian Automotive Association forecasting a 4.5% reduction in total industry volume for 2025 to 780,000 units.

The board expects the core financial performance for FY2025 to remain roughly in line with the previous year.

“While our results are still good compared to last year, the market is becoming increasingly challenging. Our operations in China continue to be impacted by intense competition resulting in lower margins. Our teams have been diligently working to improve after-sales revenue to manage costs, and to improve inventory turnover resulting in higher operating cash flows,” said Sime Darby group chief executive officer Datuk Jeffri Salim Davidson in a separate statement.

At the time of writing on Monday, shares of Sime Darby were up two sen or 0.9% at RM2.24, giving the group a market capitalisation of RM15.27 billion. The counter is down 4.68% this year.

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