Malaysia'S Largest Group Posts 20% Rise In Net

Group net profits for the year to June 30 rose 20 per cent to M$682.5 million ($273.7 million). Profits before tax climbed 31 per cent to M$1.33 billion.

But some analysts questioned the sudden improvement in the results of the financial services division which included a contribution from the purchase of a majority stake in United Malaysian Banking Corp (UMBC), the country's fourth largest bank by asset value.

The group consolidated the bank's earnings from November 11, which it regards as the effective date of the acquisition.

But the company it bought the holding from, Datuk Keramat Holdings, has also consolidated the bank's earnings in its year to January 30, meaning some earnings have been claimed by both groups.

 

Datuk Keramat says it handed over its stake in April, after all the conditions of sale were met. The financial services arm reported a rise in profit before interest and taxation from M$22.6 million to M$329.5 million.

About 20 per cent of this came from UMBC. The group did not say how much of the bank's earnings had been consolidated.

Analysts said if UMBC's earnings were consolidated from April, group pre-tax profits would have risen about 25 per cent, rather than the 31 per cent reported. The company declined to comment on the accounting question and analysts were divided on whether Sime Darby was justified in consolidating the bank's earnings from November.

Investors would have to wait for a ruling by the Malaysian Institute of Accountants, the professional body.

Revenue rose from M$9.39 billion to M$10.78 billion and earnings per share climbed from 27.4 Malaysian cents to 30.4 cents up offered an unchanged annual gross dividend of 21 cents.

The heavy equipment and motor vehicle distribution division reported a jump in pre-tax profits to M$146.6 million.

Because of buoyant demand from Malaysia's robust construction sector and strong car sales.

Sime Darby said its shares would be delisted from the London Stock Exchange from the close of business on November 15.

The company, which declined to comment on the results, did not give a reason for the delisting.