Sime Darby posts first ever quarterly loss

 KUALA LUMPUR, May 27 — The writing on the wall is plain to see. Sime Darby, the country’s second-biggest listed company was set to post its first ever quarterly loss after massive cost-overruns bled its energy division. And it did!

The loss, the first since its formation in 2007 was overwhelming. [It was merger with two other government-controlled plantation groups.]

Sime Darby posted a January-March net loss of RM308.6 million, compared with a 150.6 million ringgit profit a year ago.

The group is set to miss its own net profit target of RM2.5 billion for this year because of the losses.

Sime Darby this month removed its chief executive officer after an internal probe into energy and utilities projects which resulted in provisions of almost US$300 million (RM995.25 million).

The provisions were mainly for cost overruns in four key projects, including its Bakun hydroelectric dam project and the Maersk Oil Qatar project.

The company said the figure may not be final as the investigation is still going on. [They may be more,so it seems].

The energy and utilities division, which contributed only 0.7 percent to the group’s total operating profits in fiscal 2009, posted a loss of RM1.02 billion in the nine months to March. It did not provide a quarterly figure.Sime Darby shares hit at 10-month low of RM7.47 today ahead of the earnings report.

The losses at Sime Darby has put the Najib administration under heavy pressure to revamp the management as well as the board of directors.

Former Prime Minister Tun Dr Mahathir Mohamad had said action should be taken against all those involved in Sime Darby Berhad’s cost overruns for the Bakun project and not just chief executive Datuk Seri Ahmad Zubir Murshid.

Ahmad Zubir was asked by the board to take a leave of absence prior to the expiry of his contract in Nov 26, 2010 after the discovery of RM964 million in cost overruns from four energy and utilities projects, including the Bakun dam project, racked up by the company during his tenure.

Sime Darby chairman Tun Musa Hitam has also said he will resign if necessary following the conglomerate’s huge losses of nearly RM1 billion for this quarter arising from cost overruns in the four projects.

Well, for the sake of PNB and the Amanah Saham shareholders, the full board must go, including some former  board members who put the group in the wrong direction in the first place!