KUALA LUMPUR • Malaysia's Sime Darby, the world's largest oil palm planter by land size, yesterday said it was on track to spin off and list its plantation and property businesses by year-end, after restructuring that would create three standalone units.
Restructuring would involve reorganising borrowings and transferring assets within the group, Sime Darby said in a statement.
It also plans to settle inter-company loans by issuing new shares for spun-off entities, Sime Darby Plantation and Sime Darby Property.
Sime Darby Plantation's loans owed to Sime Darby will be capitalised via an issuance of new Sime Darby Plantation shares amounting to RM500 million (S$159 million), while Sime Darby Property will issue new shares for RM4.4 billion.
"As a next course of action upon completion of the above measures, Sime Darby Plantation and Sime Darby Property will seek admission into Bursa Malaysia," the conglomerate said.
Sime Darby announced its restructuring plan earlier this year. Its trading and logistics businesses would remain with the parent company that would retain its listed status. Sime Darby's plantation and property businesses accounted for nearly 70 per cent of profit during the 2016 business year.
The firm yesterday said net profit for the fourth quarter ended June more than halved from a year earlier to RM571 million on weak performance at its industrial and logistics businesses. Revenue grew 6.5 per cent to RM8.2 billion.
At a news conference, chief executive Mohd Bakke Salleh forecast Malaysia's July-October fresh fruit bunch production to rise versus the corresponding period last year, before declining in the first quarter of 2018. He expects Sime Darby's production to rise 5 per cent year on year for its fiscal year 2018.
Sime Darby said it expected crude palm oil prices of RM2,500 to RM2,700 per tonne and that improved production bodes well for the performance of the plantation division.
Benchmark palm oil prices were down 1 per cent at Friday's closing trade at RM2,750 a tonne.