KUALA LUMPUR: Malaysian palm oil giant Sime Darby said Thursday it swung back to a profit in the most recent quarter on the way to record full-year earnings on higher palm oil prices and improved output.
The world's largest listed palm-oil producer by acreage posted a net profit of 1.31 billion ringgit ($441 million) in the three months ended June 30 -- the fourth and final quarter of the company's financial year.
That compared with a net loss of 77.4 million ringgit in the same quarter a year earlier.
The conglomerate had been looking to recover after booking provisions in its energy and utilities division amounting to 2.09 billion ringgit in the previous financial year, which had dragged on its full-year profit.
The losses at its energy business came from cost overruns in several key projects such as the Bakun hydroelectric dam on Malaysia's Borneo island and an oil project in Qatar.
But stronger performances since then, particularly in its key plantation division, boosted full-year net profit in the just-completed financial year to a record 3.66 billion ringgit compared with a profit of 726.8 million ringgit in the previous year.
Sime Darby also reported full-year profit growth in its industrial, automotive and healthcare divisions.
The once-troubled energy division swung back to a full-year pre-tax profit of 313 million ringgit compared with a hefty loss of 1.8 billion ringgit the previous year.
"The robust performance of most of our core businesses in this financial year shows that the quality of the group's earnings has improved significantly," Sime Darby's president and chief executive, Mohamad Bakke Salleh said in a statement.
"The group will continue to expand its six core businesses, with plantation remaining as the largest profit contributor."
Sime Darby said crude palm oil prices were expected to rise slightly to an average 3,000 ringgit per tonne over the next six months with strong demand coming from traditional buyers China, India and Pakistan.
More than half of Sime Darby's profits come from its plantation sector.
Dow Jones Newswires quoted analysts saying the results were in line with expectations and that the company seemed on a strong footing despite indications of a downward trend in crude palm oil prices.
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