Sime Darby Berhad Posts 32.6% Core Profit Jump to RM1.55 Billion

Sime Darby Berhad reported a full-year core net profit of RM1.55 billion for the financial year ended 30 June 2026 (FY2026), representing a robust 32.6% increase compared to FY2025. The strong earnings growth was largely driven by stronger contributions from the Group's Motors division, which benefited from improved margins, higher electric vehicle sales, and dividend income from key regional operations.

Group revenue for FY2026 came in at RM69.5 billion, compared with RM70.1 billion in the previous year. The slight decline in revenue was more than offset by improved operational efficiency and margin expansion, resulting in a core return on equity (ROE) that increased from 6.2% in FY2025 to 8% in FY2026. The improvement in ROE reflects the group's success in generating higher returns on its shareholders' funds, even as top-line revenue moderated.

On a reported basis, the Group recorded a full-year net profit of RM1.76 billion, which represents a decline from FY2025. The previous year's results had benefited from a significantly higher pre-tax gain of RM901 million on the disposal of Malaysia Vision Valley (MVV) land, compared to a gain of RM434 million in FY2026. Excluding these one-off gains, the underlying core performance shows a clear improvement year-on-year.

In recognition of its strong financial performance, Sime Darby declared a second interim dividend of 11 sen per share. Together with the first interim dividend of 3 sen per share declared earlier in the year, this brings the total dividend payout for FY2026 to 14 sen per share, or approximately RM954 million. The dividend reflects the Group's commitment to returning value to shareholders while maintaining sufficient capital for future growth initiatives.

For the Group's fourth quarter ended 30 June 2026 (Q4 FY2026), core net profit surged by 55% to RM518 million, supported by a significant improvement in the Motors division. The division reported a higher profit before interest and tax (PBIT) of RM55 million, underpinned by several positive factors. Dividend income from the Malaysia Motors business contributed to the uplift, while higher electric vehicle sales in Singapore reflected the growing consumer appetite for sustainable mobility solutions. The division's Hong Kong, Macau, and Taiwan operations also delivered improved margins, benefiting from stronger demand and effective cost management.

The Industrial division recorded a PBIT of RM348 million during the quarter, demonstrating resilience despite mixed regional performance. Higher revenue from data centre project milestone deliveries in Malaysia provided a significant boost, as the group capitalised on the booming demand for digital infrastructure in the region. However, this was partially offset by lower contributions from its Australian operations, which faced softer market conditions, as well as impairments recognised during the quarter. The impairments, while impacting the division's reported profitability, are non-cash in nature and do not affect the group's underlying cash flow.

Looking ahead, Sime Darby's management remains cautiously optimistic about the Group's prospects. The Motors division is expected to continue benefiting from the ongoing shift toward electric vehicles and the recovery in key Asian markets, while the Industrial division is well-positioned to capture opportunities arising from infrastructure and data centre development. The Group also continues to explore strategic initiatives to unlock further value from its portfolio of assets, including potential monetisation of non-core holdings and expansion into high-growth segments.

Analysts have viewed the results positively, noting that the core profit growth and dividend payout underscore the Group's operational strength and disciplined capital allocation. The improved ROE and margin performance suggest that Sime Darby is successfully navigating a challenging macroeconomic environment characterised by supply chain disruptions and currency volatility. The Group's diversified business model, spanning motors, industrial equipment, and logistics, provides a degree of resilience that allows it to weather regional headwinds while capitalising on growth opportunities.

As of the announcement, Sime Darby's share price had reacted favourably to the results, with investors rewarding the Group's strong earnings momentum and generous dividend policy. With a solid balance sheet and a clear strategic direction, Sime Darby appears well-positioned to deliver sustainable growth in the coming financial year.