Resilience and long-term progress across financial, strategic and value distribution performance

Realisable asset value (RAV) and net worth adjusted (NWA) are the two indicators used to measure Khazanah’s performance. RAV represents the total value of our investment portfolio while NWA measures the value created in our portfolio.

As at 31 December 2016, Khazanah’s RAV stood at RM145.3 billion. This represents a marginal drop of 3.2% from RM150.2 billion at the end of 2015. Meanwhile, NWA stood at RM102.1 billion, a decrease of 6.2% from RM108.9 billion at the end of 2015.

The overall uptrend in Khazanah’s portfolio remains solid. As at 31 December 2016, RAV had increased by RM94.4 billion, or 2.9 times from the RM50.9 billion recorded in May 2004, with a compounded annual growth rate (CAGR) of 8.6% per annum. 2004 was the year Khazanah received our new mandate. Similarly, our NWA had gained RM68.8 billion, or 3.1 times from RM33.3 billion over the same period, with a CAGR of 9.3% which is in tandem with the FBM KLCI’s CAGR of 9.4% (see Portfolio Net Worth Adjusted Against FBM KLCI Since May 2004 Chart from this link).

Amidst a volatile and challenging year for equity and currency markets, Khazanah recorded a stronger profit before tax of RM1.57 billion in 2016, an increase of 33.0% from RM1.18 billion in 2015. Khazanah declared dividends of RM650 million in 2016, bringing total dividends declared since May 2004 to RM9.11 billion. Our shareholders’ funds rose to RM37.8 billion in 2016 from RM36.4 billion in 2015, while liabilities remained manageable at RM50.6 billion.

Our capital position remains strong with asset cover and net gearing standing at 2.9 times and 1.2 times, respectively. These financial ratios are a result of comprehensive risk management and prudential measures put in place to ensure our portfolio is strong and resilient in volatile environments.

Reliable Asset Value (RAV)

RM145.3 b

RM145.3 b

RAV: Market value of all equities, securities and cash held. Where no market price is available, a conservative estimate of value is used.

Net Worth Adjusted (NWA)

RM102.1 b

RM102.1 b

NWA: RAV less total liabilities and adjusted to measure value created.

“Part of Finance’s role is to manage surplus funds to obtain the most sustainable investment portfolio. We uphold financial prudency at all times and understand that at the heart it is about optimising long-term success of any investment together, in order to distribute returns back to shareholders and stakeholders for nation building interest.”

Lai Wei Ming
Vice President, Finance

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