Malaysia's Khazanah logs record profit, powered by divestment gains

[KUALA LUMPUR] Malaysian sovereign wealth fund Khazanah Nasional Bhd swung to a record profit last year, booking a huge jump in gains from divestments as it aggressively shrunk its portfolio to raise funds for a debt-laden government.

Khazanah did not disclose details of its divestments. A former government minister told Parliament in November, however, that it had sold shares in seven foreign firms including Alibaba Group Holding and Indian tech firm Infosys over 16 months.

The fund's profit from operations climbed to RM7.36 billion ringgit (S$2.44 billion) for 2019, compared with a loss of RM6.27 billion in the previous year, it said in a statement on Monday.

Gains on divestments grew more than seven times to RM9.9 billion, while impairments shrunk by a third to RM4.9 billion. Debt fell 17 per cent to RM45.8 billion.

The earnings result will give the government a dividend of RM1 billion.

Khazanah, which split its portfolio last year into commercial and strategic holdings, said its commercial fund's net asset value stood at RM73.1 billion at the end of 2019. It did not disclose the net asset value for its strategic fund but said that fund recorded an overall return of 2.9 per cent.

It also said it has received nine proposals from potential partners for Malaysia Airlines, and has shortlisted four.

The Malaysian government has been seeking a strategic partner for its national airline, which has struggled to recover from two tragedies in 2014 - the mysterious disappearance of flight MH370 and the shooting down of flight MH17 over eastern Ukraine.

Japan Airlines, domestic carrier AirAsia Group and the Malaysian arm of Indonesia's Lion Air, Malindo Air are among firms that have shown interest in investing in Malaysia Airlines, sources have told Reuters.

The fund, which is the sole owner of the carrier, said it will continue to work closely with the government and the airline in reviewing the proposals and finalising a decision.

Separately, the sovereign wealth fund confirmed that one of its employees has been infected with the novel coronavirus.

REUTERS