KUALA LUMPUR (March 4): Khazanah Nasional Bhd reported today its 2020 profit from operations fell 61% to RM2.9 billion from RM7.4 billion a year earlier against the backdrop of a challenging economy and unprecedented impact on the operating environment caused by the Covid-19 pandemic.
Despite the profit drop, Khazanah, which is the sovereign wealth fund of Malaysia, declared a dividend of RM2 billion for 2020 to the government of Malaysia.
In a statement today in conjunction with the Khazanah Annual Review 2021 event, Khazanah said the impact of the Covid-19 pandemic led to higher impairments of RM6 billion, particularly in aviation and hospitality assets, compared with RM4.9 billion in the previous year.
“Dividend income from investee companies rose to RM5.2 billion from RM3.8 billion but was offset by lower divestment gains of RM2.7 billion compared to RM9.9 billion in 2019.
“Khazanah’s financial position remained strong with debt reduced by 6% to RM43.1 billion from RM45.8 billion in 2019, while realisable asset value cover fell slightly to 2.9 times from 3.0 times,” Khazanah said.
Khazanah said today it reported a steady overall performance for 2020 despite the volatility in global financial markets and an unfavourable economic environment impacted by the Covid-19 pandemic.
The portfolio rebalancing that is ongoing presented opportunities for both divestment gains and dividend flows from its investments, according to Khazanah, which owns Malaysia Airlines Bhd via Malaysia Aviation Group Bhd.
Khazanah said it continues to deploy investments in a prudent manner in line with its refreshed mandate while taking advantage of volatility to seek opportunities in global markets.
Khazanah managing director Datuk Shahril Ridza Ridzuan said in the statement that its performance in 2020 was accomplished against the backdrop of a challenging economy and unprecedented impact on the operating environment caused by the Covid-19 pandemic.
“Despite these challenges, we were able to build on our efforts in recent years, allowing us to navigate the economic uncertainty. We identified good investment opportunities during the pandemic and ensuing market volatility. Khazanah continues to diversify our global portfolio as we build sustainable value for Malaysia as part of our long-term mandate,” Shahril said.
Source: The Edge Markets