KUALA LUMPUR: Sime Darby Bhd posted net loss of RM308.63 million in the third quarter ended March 31, 2010, compared with net profit of RM150.57 million a year ago as it took a hit from the provisions made in its energy and utilities division totalling RM964 million.

It said on Thursday, May 27  revenue rose to RM7.57 billion from RM7.47 billion a year earlier. Loss per share was 5.14 sen compared to earnings per share 2.51 sen in 2009.

For the nine months ended March 31, Sime Darby's net profit fell to RM804.20 million from RM1.3 billion a year ago as it was impacted by the provisioning for the energy and utilities division.

The division had reported an operating loss of RM1.02 billion in the first nine months of the year compared to net profit RM150.57 million a year.

Revenue for the nine months was slightly higher at RM23.74 billion compared with RM23.47 billion in the previous corresponding period. EPS were 13.38 sen versus 21.57 sen.

Of the RM964 million in provisions announced on May 13, Sime Darby had provided RM200 million for the Qatar Petroleum project; RM159 million for the Maersk Oil Qatar project; RM155 million for the marine project and RM450 million for the Bakun project.

Inclusive of the above provisions, the total provision for the four projects at the end of the third quarter amounted to RM1.3 billion.

Sime Darby said these provisions are based on the current best judgment of the forecast cost to completion of each of the projects. The QP project was completed and handed over in August 2009. The MOQ project is expected to be completed by the end of the year. Negotiations on cost recovery in all four projects are ongoing.

Despite the negative impact from the oil & gas and engineering sub-segment, the power and utilities sub-segments continued to perform well, registering operating profits of RM149 million in the first three quarters of FY2010 due to better operational results from the power plants in Thailand.  

Sime Darby said despite the negative impact from the oil and gas and engineering sub-segment, the power and utilities sub-segments continued to perform well, registering operating profits of RM149 million in the first three quarters of FY2010 due to better operational results from the power plants in Thailand.

Sime Darby acting group chief executive Datuk Azhar Abdul Hamid said the company remained committed to the oil and gas business, and that the current shortcomings in the division were being actively addressed and would be overcome.

All efforts were being put in place to fulfil the objective of turning the division around, he said.

Despite the issues facing the energy and utilities division, Sime Darby's other core businesses have continued to perform strongly in the nine month period ending March 31, 2010, he said.

"Following the reviews of the internal controls and processes in the energy and utilities division with respect to the four projects mentioned above, steps are being taken to address deficiencies and to implement improvements not only in the energy and utilities division but also across the group.

"The management believes strongly in creating value for the group via a strong portfolio of winning businesses within a conglomerate structure.  The group will remain focused on its five core businesses and strive to achieve operational excellence in all," he said.

Sime Darby said its plantation division registered a 45% increase in operating profit to RM1.71 billion for the first three quarters of FY2010 (9MFY10) compared to the same period the previous year.

This was principally driven by continuous improvement from Indonesian operations and higher average crude palm oil prices realised for the first three quarters of FY2010 of RM2,277 per tonne compared to RM2,177 per tonne for the same period in the previous year, it said.

During that period, downstream operations registered a profit of RM141 million marking a swing from loss making to profits, as it improved its performance by 222% year-on-year, it said.

The property division's operating profit for 9MFY10 increased by 69% to to RM375 million from the same period the previous year, boosted by higher residential and commercial township sales and gain from disposal of a subsidiary.

The motors division registered an operating profit of RM233 million in 9MFY10, a 71% increase over the same period in the previous year, driven by strong BMW sales in Singapore and China.

Meanwhile, Sime Darby said the industrial division reported an operating profit of RM537 million during the period under review.  

The decline of 15% year-on-year was largely attributed to lower equipment sales in Australia as customers deferred their capital expenditure during the global financial crisis in FY2009, it said.