Updated: 02/27/2013 17:07 | By Agence France-Presse

Malaysia's Sime Darby profit slides further in Q2

Malaysian conglomerate Sime Darby said Wednesday that its net profit fell for the third time in a row with a drop of 35.7 percent 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 percent 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 percent 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 percent from the previous year to more than four billion ringgit.

Sime Darby operates in more than 20 countries. It is one of the largest companies on the Malaysian stock exchange with a market capitalisation of 55.11 billion ringgit.

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