KUALA LUMPUR: Sime Darby Bhd has decided to shelve its initial public offering (IPO) plan for its healthcare business Ramsay Sime Darby Health Care Sdn Bhd (RSDHC).
It was reported earlier that the group is eyeing to list its healthcare arm on the main market of Bursa Malaysia valued at US$300mil (RM1.25bil).
Sime Darby chief executive officer Datuk Jeffri Salim Davidson (pic) said the group has decided to put the IPO plan on hold.
“We are looking at various opportunities to grow our healthcare business,” he told reporters after the group’s second quarter financial year 2022 (FY22) results briefing yesterday.
RSDHC was founded in 2013 when Sime Darby and Ramsay Health combined several hospitals in South-East Asia.
It is a 50:50 joint venture between Sime Darby and Australia’s Ramsay Health Care.
RSDHC runs six premium hospitals in Malaysia, including the Subang Jaya Medical Centre, and Indonesia, as well as a day surgery facility in Hong Kong.
On the outlook of the company for this year, Jeffri expected the company’s growth to be driven by the boom in the commodity markets and demand for vehicles in China and Australia.
“We expect demand for vehicles to remain strong as more economies open up, and that our industrial segment will be supported by the construction and mining industries in Australia,” he said.
While he reckoned that the global shortage of microchips will persist in the next six months, demand for cars will remain strong this year.
“We are confident the group will continue to see at least similar growth as last year,” Jeffri said.
For the second quarter ended Dec 31, 2021, Sime Darby’s net profit fell by 46% to RM345mil from RM633mil in the same period last year. Jeffri noted that last year, the group saw a one-off gain of RM272mil from the disposal of its stake in Tesco Malaysia.
Excluding the one-off gain, Sime Darby’s core net profit for the quarter declined 4.4% to RM345mil from RM361mil previously largely due to lower profits from the industrial division’s China and Australasia operations.
Revenue for the quarter fell 6.29% to RM10.54bil from RM11.24bil previously.
Cumulatively, for the first half ended Dec 31, 2021, Sime Darby’s net profit fell 36% to RM581mil from RM914mil a year ago, on the back of 4% drop in revenue RM21.21bil from RM22.12bil previously.
Jeffri said the group plans to expand its electric vehicles (EV) market by introducing four new models this year.
He said EV adoption in different countries will accelerate in line with the government’s push, although there are infrastructure-related issues such as lack of charging points.
“EV is here to stay. We have seen a very strong demand for EV in China and Europe.
“The issues surrounding climate change and government policies will drive the demand growth and accelerate EV adoption.
“In Malaysia, so far we have received strong demand for the BMW iX model,” Jeffri said.
Sime Darby chief financial officer Mustamir Mohamad said the four EV cars will be completed built-up (CBU) models, which refer to cars that are assembled in a foreign country.
The four models are BMW 3 Series Electric, BMW iX, BMW i4 and Volvo VC40 BEV.
He said the group has no plans yet to assemble EV cars in Malaysia and will wait for market demand to increase before assembling it here. Jeffri noted that the group is taking a proactive approach to ramp up the EV ecosystem including looking into becoming a charging station operator.
“We are already in the business of supplying charging stations through our subsidiaries. We are hoping to get property developers to install charging stations at their projects.
“In addition, we are looking at becoming a charging station operator, like the petrol stations, throughout the country. We are not quite sure about the economics of that. We are looking to see if it makes sense for us to get involved in that game,” he said.