November 26, 2015 / 5:55 AM / 4 years ago

Malaysia's Sime Darby hit by low commodity prices, Q1 profit down 34 pct

KUALA LUMPUR, Nov 26 (Reuters) - Malaysia’s Sime Darby Bhd , the world’s largest palm oil planter by land size, said net profit for first-quarter ended September slid 34 percent, hit by weaker demand in its consumer business and low commodity prices.

The company also warned its performance for the year ending 2016 would be lower than the previous year.

“The Group’s financial results for the period under review reflects the difficult market environment faced across the divisions,” Chief Executive Mohd Bakke Salleh said in a statement. “Weaker demand in consumer businesses and persistently low CPO (crude palm oil) and coal prices have impacted profitability.”

Net profit declined to 328.4 million Malaysian ringgit ($78.00 million) from 500.7 million ringgit in the year-ago period. Revenue inched up to 10.17 billion ringgit versus 10.12 billion ringgit in the corresponding period in 2014.

The company said in a separate filing that its board had approved plans to establish a 3 billion ringgit sukuk programme.

Shares of Sime Darby were trading 1.4 percent higher after the earnings announcement. The stock has dropped 11 percent year to date, underperforming the benchmark stock index’s by 4.4 percent. ($1 = 4.2100 ringgit) (Reporting By Yantoultra Ngui and Praveen Menon; Edited by Kavita Chandran)

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