By Khairie Hisyam
Diversified conglomerate Sime Darby Group Berhad is aiming to complete its Motors spin-off listing by early next year.
“Hopefully by early next year,” said president and group chief executive Mohd Bakke Salleh, though adding that the listing is very much still a “work-in-progress”.
Earlier this month Bloomberg reported that Sime Darby has appointed a number of banks to be involved in a spin-off listing of Sime Darby’s Motors division, which represents some 30 brands across China, Australia, New Zealand, Malaysia, Singapore, Thailand — including some of the world’s most recognisable luxury makes.
Quoting unnamed sources, Bloomberg reported that the spin-off may raise up to US$900 million (RM2.87 billion).
However the proposed listing is subject to prevailing market conditions, said Mohd Bakke, adding that it is still early days to share more information about the spin-off.
“Overriding this would be the market conditions, definitely the most important element before we commit ourselves,” said Mohd Bakke today.
“Ballpark figure will be released when we’re ready to play the game,” he added in response to questions on how much Sime Darby is looking to raise in initial public offering (IPO) proceeds from the listing.
The Motors division accounted for 15% of the group’s earnings for the financial year ended June 30, 2014 (FY14), recording RM634.5 million from group results of RM4.19 billion.
This however is a 10.8% dip from last year’s earnings at RM711.4 million despite overall higher sales volume in the financial year just ended, which at 92,112 units sold represented a 3% rise from 89,126 units in FY13.
Overall Sime Darby posted RM3.9 billion in pre-tax profits from RM43.9 billion revenue for FY14, 8% lower than RM4.31 billion in pre-tax earnings recorded in FY13, during which the group saw higher revenue at RM46.1 billion.
“Profit before tax of the Group declined by 8.1% largely due to lower profits from all business segments, except Property and Others,” said Sime Darby.
However this translated into full-year net profits of RM3.35 billion for FY14, 19.6% higher than the group’s targeted RM2.8 billion, though 9.4% lower than RM3.7 billion recorded in FY13.
At 5.00pm, Sime Darby was down 1 sen at RM9.46.
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