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KUALA LUMPUR, May 29 (Reuters) - Malaysian conglomerate Sime Darby Bhd posted an 18 percent fall in third-quarter net profit on Thursday due to substantially lower contribution from its motor business, and warned of a tougher fourth quarter.
Sime said net profit fell to 148.2 million ringgit ($39 million) in the three months to end-March 2003 from 181.4 million ringgit in the same 2002 period.
Revenue rose three percent to 3.1 billion ringgit.
Sime said full year earnings would fall short of market expectations as it suffers from falling margins in its motor business and effects from SARS and the Iraq war.
"Results for the year will be about the same level achieved last year," group chief executive Nik Mohamed Nik Yaacob told a news conference. Reuters Research put a consensus net profit for the full year at 855.2 million ringgit, up from 771.2 million a year earlier.
One of Asia's oldest conglomerates, Sime has diversified businesses spanning plantations, property, tyre manufacturing, power generation and car distribution. However, net profit for the first nine months of its financial year to end-June rose two percent to 568.7 million ringgit from 555.7 million previously.
Apart from plantations and energy divisions, all other Sime's businesses turned in lower profits in the third quarter.
The plantations division, helped by higher palm oil prices, continued to be the biggest contributor, accounting for 26 percent of group operating profit. Selling prices of crude palm oil averaged 1,560 ringgit a tonne in the January-March quarter, up from 1,453 ringgit in the preceding quarter. Profit from motor vehicle distribution fell 30 percent to 48.6 million ringgit in the third quarter from the same period last year due to thinning margins resulting from a stronger euro against ringgit.
Nik Mohamed said the group's motor division would be further hit by the loss of BMW wholesale car franchise.
German automaker BMW AG plans to set up a company to handle the Malaysian wholesale business, with Sime retaining assembly and retailing rights. Sime, currently the franchise holder for the German marque, wants to retain some interest in the wholesaling. "I hope we can finalise everything by next month. There's no major stumbling block to prevent us from resolving the issue," Nik Mohamed said.
Motor vehicle distribution accounted for a third of the Sime group's annual turnover of 12 billion ringgit in the year to end-June 2002.
Sime shares, suspended on Thursday for the earnings announcement, last traded at 5.05 ringgit, a gain of 2.2 percent since the start of the year. ($1 = 3.8 ringgit)