KUALA LUMPUR, March 4 — Khazanah Nasional Berhad posted a profit of RM2.9 billion for the financial year 2020 despite the fallout wrought by the Covid-19 pandemic on the back of investments in secure long-term portfolios and readjustments in debt management.
But last year’s revenue is still a far cry from 2019 after a successful turnaround saw profit from operations shoot up to a record RM7.36 billion compared to a loss of RM6.27 billion the year before.
The Malaysian sovereign wealth fund has had a “steady” performance in the face of the coronavirus crisis, managing director Datuk Shahril Ridza Ridzuan told reporters in a Zoom video conference this afternoon.
“Khazanah 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,” he said in a statement issued shortly after the briefing.
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, the fund reported.
Total dividend for the government amounted to RM2.0 billion for 2020.
Total impairments also climbed to RM6 billion compared to RM4.9 billion in the previous year, mostly from its aviation and hospitality assets that Khazanah attributed to Covid-19’s impact.
Khazanah is the largest shareholder of Malaysia Airlines Berhad. The national carrier has been struggling to regain its footing even before the pandemic brought a total halt to the aviation industry, as governments around the world shut down borders to stem the virus’ spread.
Impairment from MAB alone amounted to RM5 billion, Shahril told the media briefing.
Khazanah previously said it would commit to help the ailing carrier turn around and facilitate a restructuring plan around MAB’s RM15 billion debt.
But Shahril was coy when asked about the prospect of recovery.
“It all depends on how quick borders open and we don’t see (the aviation industry) recovering until 2023, or maybe 2022 the earliest,” he said.
Still, Khazanah said its financial position remains stable notwithstanding the losses from portfolios hurt by the public health crisis, with total debt reduced by six per cent to RM43.1 billion from RM45.8 billion in 2019.
Its realisable asset value cover also fell slightly to 2.9 times from 3.0 times.
The fund said it expects 2021 to remain a challenging year, even as the National Covid-19 Immunisation Programme begins, with expectation that the vaccine rollout in Malaysia and across the world will take time.
“We will see more progress towards a return to recovery and normalisation as the world gets a better grip of the situation and the impact of the various public health and economic measures gains further traction,” Shahril said.
Investments will stay prudent and vigilant with the fund to focus on five strategic priorities for the coming years as it waits for clearer signs of global recovery.
“These priorities include further enhancing our commercial returns, delivering impactful value with our strategic investments,” Shahril said.