Malaysian conglomerate Sime Darby Bhd said today its first half net profit rose 6.3 percent on year, mainly due to stronger earnings from its plantation, property and power divisions.

Net profit in the six months to December grew to RM446.79 million from RM420.47 million the year before.

The plantation division continued to benefit from higher palm product prices with crude palm oil prices (CPO) averaging RM1,532 per tonne compared with RM1,408 the previous year, the company said.

However, its heavy equipment, motor vehicle and general trading and services sectors were weaker, with the profitability of the motor vehicle sector adversely affected by the unfavourable currency exchange rates, particularly against the euro, it said.

Group chief executive Nik Mohamed Yaacob told a news conference Sime Darby expects its pre-tax profit for the full year to June 2004 to match the previous year's.

Adverse impact

In the year to June 2003, Sime Darby posted a pre-tax profit of RM1.28 billion and a net profit of RM809.71 million on the back of sales of RM13.72 billion.

For the first half of the current fiscal year, the company registered a pre-tax profit of RM682.58 million against 663.48 million previously, on sales of RM7.21 billion against RM7.01 billion previously.

Asked about the impact of the strengthening euro on the group's full-year earnings, Nik Mohamed said: "We expect the same adverse impact as registered in the first six months, if the euro continues at this level."

The ringgit has been pegged at 3.80 to the US dollar since 1998.

Nik Mohamed said Sime Darby continued to seek opportunities for investments in the power and motor businesses in the region. - AFP