Sime Darby profit slides further in Q2

KUALA LUMPUR (AFP) – Malaysian conglomerate Sime Darby said Wednesday that its net profit fell for the third time in a row with a drop of 35.7 per cent in the second quarter on the back of lower crude palm oil prices.

The world’s largest listed palm oil producer by acreage recorded a net  profit of 708.5 million ringgit ($228.6 million) for the three months ending  December, down from 1.10 billion ringgit a year earlier, it said in a statement.

Sime Darby said higher sales and better yield could not offset lower crude  palm oil prices, which fell 21.3 per cent on average from the same quarter in  2011.

Group chief executive Bakke Salleh said the company had expected challenges  as the global economic slowdown also hit other sectors where Sime Darby  operates, such as property, energy and utilities and healthcare.

He said “operational improvements”, especially in plantations, had helped  the bottom line, and the group remained on target.  Sime Darby added that crude palm oil prices were expected to modestly  recover, but cautioned that its overall prospects “are very much dependent on  the global economic recovery.”

“We are confident of riding out the current challenging environment and  reaping the benefits in the future when the global economy gets on the recovery  path,” Bakke said.

Profit for the first six months stood at 1.7 billion ringgit after net  profit for the first quarter also fell 7.8 per cent year-on-year, marking the  second decline in a row. Sime Darby has said it targets a net profit of 3.2 billion ringgit for the  current financial year. For the last fiscal year, net profit increased 13.0 per cent from the previous year to more than four billion ringgit.