The decrease in profit is after taking into account the Hajj Financial Assistance expenses given to pilgrims for the season 1443H/2022M

by SHAFIQQUL ALIFF / pic by TMR

LEMBAGA Tabung Haji (TH) net profit slumped to RM1.03 billion in the first six months to June 30, 2022 (1H22), compared to RM1.22 billion in 1H21, after taking into account expenses including zakat allocation.

TH in a statement said the decrease in profit is after taking into account the Hajj Financial Assistance expenses given to pilgrims for the season 1443H/2022M.

It said the haj cost for the 1443H/2022M season is RM28,632 compared to the initial estimate of RM25,540 per pilgrim, while the haj cost for the 1440H/2019M season was RM22,900 per person.

However, TH said they recorded the highest level of the total income of RM1.47 billion for the 1H22 with total deposits amounting to RM88.09 billion since the 59 years of TH’s establishment.

TH said the trust and support for TH as an institution that helps Muslims save and perform haj remains intact where during 1H22, more than 200,000 new savings accounts were opened, further witnessing an increase in the total number of TH depositors to 8.6 million people.

“The majority of TH’s income is derived from fixed income investments which have contributed as much as RM966.34 million in 1H22 which includes 65.71% of its total gross income.

“The stock investment also contributed as much as RM224.62 million which recorded an increase of RM41.27 million compared to RM183.35 million in the same period last year. TH equity investment accounted for 15.27% of the total income, while real estate investment earned an income of RM213.66 million, followed by other incomes of RM66.07 million.

“The achievement reflects TH’s resilience even when faced with the effects of the Covid-19 pandemic which has not yet ended such as the threat of inflation, market uncertainty and the weakness of the world economy,” TH said in a statement.

At the same time, TH said the haj fund expenditure also increased by RM134.42 million in 1H22 to RM437.3 million following the Haj Financial Assistance to pilgrims in 1443H/2022M which continued to be borne by TH.

The total Hajj Financial Assistance expenditure is expected to increase to RM185.7 million when the haj season 1443H/2022M ends in the third quarter, it added.

“If Hajj Financial Assistance expenses are not taken into account, TH’s operating expenses only increased by 3.65% compared to expenses for the same period last year, as a result of prudent management measures despite challenging economic conditions and the threat of inflation.

“TH always takes prudent measures in optimising expenses to ensure efficient management of expenses,” it added.

According to TH, the durability of TH’s financial achievements reflects a sustainable investment approach with solid liquidity management, guided by Strategic Asset Allocation which aims to minimise the impact of long-term fluctuations in the market.

“This is in line to manage depositors’ savings for the long term to perform haj. More than half or 58% of TH’s assets have been allocated for investment in fixed income instruments such as sukuk that provide stable and safe returns in the long term.

“TH’s equity investment return which increased by 23% also outperformed the benchmark Hijrah Syariah Index of Bursa Malaysia which fell by —14.3% in the year’s first half. TH focuses on stock investments with a good foundation and quality from the aspect of durability and a good dividend track record,” TH added.

TH Group MD and CEO Datuk Seri Amrin Awaluddin said this investment approach that prioritises the security of returns reflects TH’s commitment to protecting the interests of depositors by preserving and increasing their savings to fulfil the obligations of the fifth pillar of Islam.

“Going forward, TH will continue efforts to increase income through investment and manage operating costs more efficiently to ensure sustainable and stable profit distribution for depositors.

“TH always appreciates the support of stakeholders, especially depositors and continues to focus on a high level of governance, compliance and integrity for the good of TH and its depositors,” he said.