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Khazanah dividend payout below target

The Star Online logo The Star Online 18/2/2019 By GANESHWARAN KANA
a man wearing a suit and tie: Khazanah managing director Datuk Shahril Ridza Ridzuan told StarBiz that the sovereign wealth fund had already paid the RM1.5bil dividend to the Finance Ministry.  Details on the fund’s performance for the year, he said, would be announced soon, with the release of its 2018 financial report in end-February. © Provided by SMG Business Services Sdn Bhd. Khazanah managing director Datuk Shahril Ridza Ridzuan told StarBiz that the sovereign wealth fund had already paid the RM1.5bil dividend to the Finance Ministry. Details on the fund’s performance for the year, he said, would be announced soon, with the release of its 2018 financial report in end-February.

KUALA LUMPUR: Khazanah Nasional Bhd paid a total dividend of RM1.5bil to the government in 2018 – its highest payout in seven years.

The amount, however, was below the government’s target.

In 2017, the sovereign wealth fund paid RM1bil in dividends.

The government, in its fiscal outlook 2019 report released in November, has targeted to receive RM2bil from Khazanah.

Khazanah managing director Datuk Shahril Ridza Ridzuan told StarBiz that the sovereign wealth fund had already paid the RM1.5bil dividend to the Finance Ministry.

Details on the fund’s performance for the year, he said, would be announced soon, with the release of its 2018 financial report.

“We will conduct an annual briefing around end-February,” said Shahril in a text message.

As for 2019, Shahril added that Khazanah’s dividend payment to the government is expected to remain over the RM1bil-mark, despite the challenging macroeconomic environment.

To recap, in 2017, the sovereign wealth fund declared RM1bil in dividend, after it recorded an all-time-high total investment value of RM115.6bil.

It highest annual payout was in 2011 when it declared a payout of RM3bil. Shahril was appointed to lead Khazanah on Aug 3, 2018, succeeding Tan Sri Azman Mokhtar who resigned.

Previously, Shahril had served as the chief executive officer of the Employees Provident Fund.

Speaking to reporters on the sidelines of Nomura Islamic Asset Management Malaysia’s 10th anniversary conference, Shahril hinted that Khazanah may pump in more money into its wholly owned subsidiary Malaysia Airlines Bhd, on top of the RM6bil capital injection it had made.

However, the decision will be made only after reviewing Malaysia Airlines’ strategic business plan.

“Malaysia Airlines must first come out with its own strategy. We are still waiting for it to come back to us with its strategy,” he said.

It was reported that the airline is in the midst of reviewing its existing business strategy.

Khazanah had initially aimed to bring Malaysia Airlines back to profitability within three years after it took the company private. However, the airline has failed to meet the profitability deadlines of end-2017 and end-2018.

Malaysia Airlines hopes to break even by end-2019 and become profitable by 2020, and to possibly seek a re-listing on Bursa Malaysia.

The airline reported higher losses of RM812mil for its financial year 2017, as compared to the RM439mil loss recorded in 2016.

In December last year, Malaysia Airlines group chief executive officer Izham Ismail said the company expected to end 2018 with a lower loss than a year before.

“Moving forward, this year looks similarly challenging but we remain committed to improving performance and reducing costs while managing external factors beyond our control,” he had said in an earlier statement.

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