Conglomerate Sime Darby on today said its year to June 2005 net profit fell 12.7 percent to RM801.2 million from RM918.7 million a year earlier due to provisions for its China auto operations and the Bakun hydroelectric project.

Sime Darby said it had loans outstanding for vehicles of RM163.7 million for the nine months to March from its China motor operations. Those are largely loans extended to dealers in China, mainly to finance purchases of BMW cars.

It said losses on contracts for the Bakun dam in Sarawak were expected to reach RM55 million.

However, the conglomerate said operating profit of RM1.4 billion for the full year was its strongest profit before exceptional items since the 1997 Asian financial crisis.

Higher sales of heavy equipment

Sime Darby said the heavy equipment division was its top performer with operating profit rising 87.9 percent due largely to Australian unit Hastings Deering's enjoying higher sales of equipment.

It added that the heavy equipment operations in Malaysia and Singapore also improved significantly due to strong deliveries to the logging sector.

The conglomerate said that its motor division registered a growth of 47.5 percent in operating profit due to the profit contribution from the Hyundai motor operations in Malaysia and the truck sales and servicing businesses in New Zealand.

Chief executive officer Ahmad Zubir Murshid said Sime Darby could see improved earnings for the year to June 2006 in the absence of provisions for its Bakun hydroelectric project in Sarawak and its China auto operations.