PETALING JAYA (May 25): Sime Darby Bhd reported a sharp increase in net profit for the third quarter ended March 31, 2026, more than tripling year-on-year largely due to a one-off gain from a major land disposal at Malaysia Vision Valley (MVV), even as revenue declined slightly on softer industrial equipment sales in Malaysia.
Net profit attributable to shareholders jumped 238.9% to RM654 million from RM193 million a year earlier, driven mainly by a RM434 million gain from the disposal of land in Negeri Sembilan. Revenue fell 3.4% to RM15.75 billion from RM16.31 billion, reflecting weaker performance in parts of its industrial equipment segment.
Excluding one-off items, however, Sime Darby’s underlying performance showed more moderate but solid growth, with core net profit rising 55.6% to RM263 million.
A key contributor to the strong quarterly earnings was the disposal of land at Malaysia Vision Valley, which generated a substantial accounting gain.
The gain on property disposals for the nine-month period reached RM412 million, highlighting how strategic land monetisation continues to play an important role in Sime Darby’s earnings profile.
The group’s effective tax rate for the quarter stood at 23%, slightly below the statutory 24%, partly due to Real Property Gains Tax treatment on land disposals.
Sime Darby’s Industrial division, which distributes Caterpillar heavy equipment and provides after-sales services for mining, construction and infrastructure sectors, posted a 10.9% increase in profit before interest and tax (PBIT) to RM245 million.
Performance was supported by stronger equipment and product support margins in Australia, although this was partly offset by weaker sales and higher operating costs in Malaysia, including receivables impairment.
For the nine-month period, Industrial PBIT declined 7%, reflecting softer product support and rental activity earlier in the year in Australia.
Despite short-term fluctuations, the group expects medium- to long-term demand from Australia’s mining sector to remain strong, particularly for equipment servicing and replacement cycles.
The UMW division, which includes automotive manufacturing and engineering, recorded stable quarterly performance with PBIT of RM196 million. Improved lubricants performance helped offset softer automotive margins, while nine-month profit rose 6.8%.
Meanwhile, the Motors division delivered a stronger performance with PBIT rising 25.4% to RM143 million, supported by higher electric vehicle sales in Singapore and improved margins in Hong Kong.
This highlights the growing contribution of electric vehicle-related sales and regional automotive recovery in key markets.
For the nine months ended March 31, Sime Darby reported a 10.9% increase in net profit to RM1.44 billion, even as revenue remained broadly stable at RM52.76 billion.
The improvement was driven by lower finance costs, reduced borrowing levels and stronger performance in the Motors segment.
Operating cash flow for the period stood at RM2.93 billion, down from RM3.80 billion a year earlier due to working capital movements, while total borrowings were recorded at RM6.51 billion, with significant exposure to Australian dollar-denominated debt.
Net assets per share improved slightly to RM2.85.
The group declared an interim dividend of 3 sen per share, amounting to RM204 million, which was paid on March 31, with no additional dividend declared for the quarter.
Looking ahead, Sime Darby maintained its full-year guidance, expecting core performance for the year ending June 30, 2026 to remain in line with FY2025 results.
The group acknowledged ongoing challenges, including geopolitical uncertainty, softer consumer demand and intensifying competition in the automotive sector. However, it noted that Malaysia’s affordable vehicle segment remains relatively resilient.
Group chief executive Datuk Jeffri Salim Davidson said the results reflect the resilience of Sime Darby’s diversified portfolio, particularly its industrial and automotive businesses, which have helped the group navigate a more complex operating environment.
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