Better profit distribution due to improved financial performance and positioning based on prudent cost management measures
By DASHVEENJIT KAUR / Pic By MUHD AMIN NAHARUL
LEMBAGA Tabung Haji (TH) announced a profit distribution of 3.05% after zakat for its financial year ended Dec 31, 2019 (FY19), with a payout totalling RM2.1 billion.
The pilgrims fund’s payout was RM1.2 billion higher than the RM913 million distributed for FY18.
TH attributed the improved profit distribution to its improved financial performance and positioning based on sustainable investment strategies and prudent cost management measures.
Its investment revenue stood at RM3.3 billion, of which RM1.2 billion was raised in the fourth quarter of last year.
“Overall, TH’s investment income is more stable where fixed income investments generate 58% of revenue or RM1.9 billion,” the fund said in a statement last Friday.
Meanwhile, real property and equity investments, as well as Islamic money market instruments accounted for RM500 million (15%), RM500 million (15%) and RM400 million (12%) respectively.
The move by TH to shift its investment strategy to more stable investment assets helped ease the pressure caused by volatile stock market conditions, as well as the global trade war.
Its total assets as of Dec 31, 2019, stood at RM74.3 billion, while total liabilities amounted to RM71.4 billion.
For FY19, the fund’s profit after zakat rose 19% to RM1.9 billion from RM1.6 billion recorded the previous year.
“The profit had taken into account the RM86 million allocated for zakat payments to the state Islamic councils in Malaysia and RM370 million for the management and provision of facilities to haj pilgrims.
“The financial performance also enabled TH to maintain its haj pilgrimage cost at RM9,980 compared to the actual cost, which was RM22,900 for all muassasah (private package) haj pilgrims who performed their haj for the first time last year,” it said.
The fund’s income distribution was the balance of the profits from its investments after taking into account its expenditures, haj subsidy costs, zakat payments and management costs, TH group MD and CEO Datuk Nik Mohd Hasyudeen Yusoff said.
“As such, TH depositors will not only derive benefit from their savings, but also directly contribute towards assisting Malaysian haj pilgrims to perform the fifth pillar of Islam and protecting the welfare of the deserving recipients of zakat.
“TH pays the zakat on behalf of the depositors, thus, they do not have to pay zakat on their savings and the profit they derive from it,” he said.
Moving forward, Nik Mohd Hasyudeen said the fund would continue to improve the depositor’s benefits from their savings following the shift to the wakalah savings contract by introducing more added-value features, while ensuring a sustainable investment performance.
The income distribution for FY19 is based on the depositor’s average monthly minimum balance and will be credited to their accounts starting March 16, 2020.