Rental grows in importance for Sime

Malaysia’s Sime Group has more than doubled its rental-related revenues since 2021.

Rental revenues now account for 10% of Sime’s Industrial division, which includes Caterpillar dealerships in Malaysia, Singapore, China, Australia and New Zealand, as well as Australian rental business Onsite, which it acquired in 2023.

The company reported that rental revenues accounted for 10% of Sime Industrial’s total RM19 billion (€3.9 billion) revenues in the year to 30 June, which equates to RM1.9billion (€390 million). The equivalent figure in 2021 was 4% of revenues, equating to RM640 million (€130 million).

Sime said its Onsite rental business in Australia was “meeting business-case expectations”. Its Caterpillar dealerships, including Hastings Deering in Australia, also run rental businesses.

Annual sales for the Industrial division were down 7.1% to RM19 billion, with profits before interest and tax were 9.6% lower at RM1.3 billion.

It is the group’s strategy to increase its after-market and rental business within the Industrial division as part of a “rebalancing of our product mix to higher-margin annuity revenue streams.”

After sales and rental now account for 62% of the division’s revenues, up from 48% in 2021.

Dato’ Jeffri Salim Davidson, Sime’s group CEO, said it had been a challenging year, with multiple headwinds across key markets; “Tractors Malaysia which retails and maintains Caterpillar industrial equipment has delivered improved profitability, driven by higher parts sales with better margins and data centre projects.

“Although our Industrial Australasia operations have been impacted by a parts price reduction and a weaker Australian dollar this year, it is still the division’s biggest contributor and is well positioned to benefit from Australia’s growing resources industry.”