The Bank of Russia unexpectedly maintained its key interest rate at a record-high 21% , defying analysts’ expectations of another significant hike as inflation remains stubbornly elevated. The decision marks a shift toward a more measured approach in balancing economic growth and price stability. Key Details Inflation Concerns: Annual inflation climbed to 8.9% in November, well above the central bank’s 4% target , with inflation expectations reaching 13.9% in December. Policy Rationale: The central bank cited the significant tightening of monetary conditions after October’s 200-basis point hike as sufficient to resume disinflationary processes. Governor Elvira Nabiullina emphasized avoiding both economic overheating and severe slowdowns. Economic Overheating: Elevated government spending on the war in Ukraine and social programs, coupled with labor shortages and rising wages, have fueled strong domestic demand, exacerbating price pressures...
Sime Darby Bhd concluded its financial year ended June 30, 2024 (FY2024) on a robust note, with net profit more than doubling to RM3.31 billion from RM1.46 billion in the previous year. This impressive increase was primarily driven by a significant RM2 billion gain from the disposal of its stake in Ramsay Sime Darby Health Care (RSDH) in December 2023.
Key Takeaways:
Significant Profit Increase and Dividend Declaration: Sime Darby's net profit surge to RM3.31 billion for FY2024 reflects a strong financial performance, bolstered by the one-off gain from the RSDH sale. Earnings per share rose to 48.5 sen, compared to 21.4 sen in FY2023. Excluding the one-off gain, the group's core net profit still showed a healthy 14% increase to RM1.3 billion, driven by strong performances in its industrial business in Australia and its motors businesses in Malaysia, Singapore, and Taiwan. The company declared a second interim dividend of 10 sen per share, bringing the total FY2024 payout to 13 sen per share or RM886 million.
Revenue Growth and Quarterly Performance: Sime Darby reported a 39% increase in revenue for FY2024, reaching RM67.13 billion, up from RM48.29 billion in the previous year. However, for the fourth quarter of FY2024 (4QFY2024), net profit fell sharply by 85.7% to RM89 million, primarily due to one-off impairments, losses in its motors operations in China, and higher finance costs. Despite this, quarterly revenue improved by 41.4% to RM18.8 billion, reflecting the group's continued strong operational performance.
Outlook and Market Conditions: Looking ahead, Sime Darby highlighted challenges such as excess production and oversupply in the automotive market, particularly in China, which is expected to exert downward pressure on margins. Despite these challenges, the company anticipates that its core financial performance in FY2025 will remain consistent with FY2024, supported by robust demand for equipment and maintenance in the Australian mining industry. The company also emphasized its strategic shift to focus on its core motors and industrial businesses following its exit from the healthcare segment.
At the noon market break on Tuesday, Sime Darby’s shares were down slightly by 1.13% to RM2.63, with a market value of RM17.93 billion. Despite the dip, the stock has risen 10.5% year-to-date.
In summary, Sime Darby’s strong FY2024 performance, driven by strategic disposals and robust operational results, positions the company well to navigate the challenges ahead, particularly in the automotive sector.
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