Khazanah Nasional Berhad (Khazanah) profit from operations fell to RM2.9 billion in 2020 compared to RM7.4 billion in 2019 as the impact from the Covid-19 outbreak led to higher impairments of RM6 billion.
The sovereign wealth fund’s Commercial Fund generated a two-year rolling time-weighted rate of return of 1.5 percent against their long-term targeted return Malaysian Consumer Price Index +3 percent on a five-year rolling basis.
The Commercial Fund’s Realisable Asset Value stood at RM95.3 billion as at the end of 2020.
Khazanah’s Strategic Fund recorded a gain of 0.3 percent in 2020, against the targeted rate of return of the 10-year Malaysian Government Securities yield on a five-year rolling basis.
The Strategic Fund’s portfolio Realisable Asset Value stood at RM27.9 billion as at Dec 31, 2020, decreasing by 15 percent from RM32.9 billion a year ago.
The portfolio was heavily impacted by the fall in market value of key listed assets and provisions made on impairments to aviation and hospitality assets.
Khazanah’s financial position remained strong with debt reduced by 6 percent 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.
“Our performance in 2020 was accomplished against the backdrop of a challenging economy and unprecedented impact to the operating environment caused by the Covid-19 pandemic. 2021 will continue to be a challenging year,” Khazanah Managing Director Shahril Ridza Ridzuan said.
“As we gradually expand our global assets portfolio to move away from a reliance on domestic sources of income, we are hopeful that Malaysia as a whole will move towards increasing its economic complexity and do more to make it easier for businesses to open, including further deregulation,” he added.
Khazanah declared a dividend of RM2.0 billion for 2020 to the Putrajaya.