|Sime Darby aims for 1 mil hectares by 2015|
|Written by Syarina Hyzah Zakaria of theedgemalaysia.com|
|Thursday, 30 August 2012 10:18|
KUALA LUMPUR: Sime Darby Bhd aims to increase its plantation landbank to one million hectares in the next three years, eyeing land expansion in Indonesia and Africa, group CEO Datuk Mohd Bakke Salleh said.
“We are working towards a significant increase in our landbank and are looking at Africa and Indonesia,” Bakke said yesterday after announcing the conglomerate’s results for the fourth quarter of the financial year ended June 30 (4QFY12).
Presently, the group has 878,794ha in Malaysia, Indonesia and Liberia. Of this, 522,000ha is planted with oil palm and around 350,000ha is unplanted.
“We would like to see that amount double up by 2015 or 2016,” he said, adding that Sime has allocated some RM3 billion in capital expenditure (capex) for its plantation arm for FY13. It increased its capex by 23.02% to RM7.75 billion compared with RM6.2 billion for its recently ended financial year.
The group’s expansion plan is in line with Felda Global Ventures Holdings Bhd’s (FGV) aim to hit the one million hectare mark in the next five years.
Last week, Datuk Sabri Ahmad, FGV president and CEO, indicated it is also in the process of beefing up its plantation landbank and plans to acquire 150,000ha in Indonesia, Cambodia and Myanmar over the next few years.
FGV currently has 850,000ha of land, of which 500,000ha is managed on behalf of the Felda settlers. Bakke, meanwhile, said Sime Darby has postponed its initial plans to list its businesses in light of the challenging global financial landscape.
“It is off the table in the near term as we have encountered a number of challenges this year, most likely these entities will be listed in 2014 instead,” he said after the media briefing.
Bakke highlighted that Sime is “working towards a number of initiatives to park its businesses under a few listed companies in the future”.
For 4QFY12, the group’s net profit fell 16.79% to RM1.09 billion or 18.29 sen per share, from RM1.31 billion a year ago, while its revenue rose 8.12% to RM14.12 billion from RM13.06 billion previously.
All sectors across the board reported an increase in net profit except for its plantation arm which fell 3% or RM3.2 billion from RM3.7 billion last year. The fall in its plantations division was due to tree stress and the lagging effect of the El Nino weather phenomenon over the past two years.
“In particular, the estates in Kalimantan saw an 11.4% decline in fresh fruit bunch (FFB) production due to the impact of the prolonged dry spells in 2009 and 2011,” he said.
However, the decline in FFB was mitigated by higher average crude palm oil (CPO) prices -- RM2,925 per tonne compared with RM2,906 per tonne last year -- and improvements in its oil extraction rates.
While CPO prices are currently choppy and volatile, Bakke believes there is still upside and is of the opinion that prices should be able to “firm up”.
For FY12, Sime’s revenue increased 13.71% to RM47.60 billion compared to RM41.86 billion recorded in FY11. Net profit was up by 13.39% to RM4.15 billion from RM3.66 billion.
“Notwithstanding the encouraging results, we remain mindful of the uncertainties in the business environment as we move ahead amid volatility in the global economy,” he said.
Sime Darby’s board has recommended a final single-tier dividend of 25 sen for FY12.
“The dividend is proposed to be paid on Dec 14 and the entitlement date for the dividend payment is Nov 30, 2012,” notes to its financials said.