Finance Minister Datuk Seri Najib Razak has maintained that Sime Darby Bhd’s recent losses from its energy and utilities division will not impact the conglomerate’s dividend payout policy which allocates 50% of its net profit for returns to shareholders.
Najib (Pekan-BN) told the Dewan Rakyat, in a written reply dated Tuesday, that Sime Darby had made dividend allocations of seven sen per share for its financial year 2010 (FY10).
According to Najib, a total of RM421 million had been allocated for dividends, representing some 52% of its net profit for the first three quarters of FY10.
For the nine months ended March 31, 2010, Sime Darby’s net profit fell to RM804.2 million from RM1.3 billion a year earlier as it was impacted by the provisioning for the energy and utilities division.
Najib added: “The government is very concerned about (Sime Darby’s) losses given the size of the losses and its potential impact on more than 10 million Malaysians who are Sime Darby stakeholders via funds managed by Permodalan Nasional Bhd (PNB) and their savings in KWSP.”
In reply to Mohd Firdaus Jaafar (Jerai-PAS), Najib reiterated that the government was also “carefully monitoring the developments arising from the losses”.
The prime minister pointed out that government agencies such as the Malaysian Anti-Corruption Commission (MACC) and the Securities Commission (SC) had commenced detailed investigations on Sime Darby.
Najib added that Sime Darby was also in the midst of conducting a forensic audit by independent consultants and lawyers, which is expected to be completed at the end of August.
In a separate reply to the Dewan Rakyat on July 13, Najib also maintained that Sime Darby’s financial position was still strong despite concerns over the huge cost overruns and project delays in oil and gas projects in Qatar and the Bakun hydroelectric dam, undertaken by Sime Darby’s energy and utilities division.
Najib had noted that despite the provisions, Sime Darby still reported pre-tax profits of RM1.7 billion and net profits of RM804 million for its first three quarters of FY10.
These were contributed by Sime Darby’s plantations, industrial, property and motors divisions, Najib added.
This article appeared in The Edge Financial Daily, July 15, 2010.
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