KUALA LUMPUR (Jan 13): Khazanah Nasional Bhd declared lower dividends of RM650 million in 2016, while profit before tax grew by 32.1 8% to RM1.56 billion, from RM1.18 billion in 2015.
 
In 2015, Khazanah declared dividends of RM1.05 billion. This works out to a drop of 38%, when comparing dividends declared for 2016 and 2015.  
 
In a statement today, Khazanah disclosed that its shareholders' fund rose 1.99% to RM37.08 billion in 2016, from RM36.35 billion in 2015.
 
Khazanah said in line with weakness in most benchmark equity markets and currencies, its portfolio NWA (net worth adjusted) declined 6.4% to RM101.9 billion as at Dec 31, 2016, from RM108.9 billion in 2015.
 
Nonetheless, the sovereign wealth fund said the long run value creation trend remains "strong" with NWA up by 3.1 times or a compound annual growth rate of 9.3% per annum, for the period May 2004 to Dec 31, 2016.
 
Khazanah's managing director Tan Sri Azman Mokhtar said the fund recorded both a profitable and resilient performance in 2016, amidst the challenging and volatile global economic environment which affected all core benchmark markets and currencies.
 
"In spite of general weakness in global market conditions and in equity and currency markets in emerging economies especially, the underlying strength and quality of our portfolio ensured that long term value creation remained intact," he said.
 
"Just as importantly, many risk management and prudential measures have been put in place over the years, resulting in a strong and resilient portfolio which allows us to ride story and even medium term volatility, and continue focusing on long term value creation, as we have done over the last decade and more," he added.
 
At a press conference today, Azman said moving forward, the volatile, uncertain, complex and ambiguous global business and market environment is expected to continue in 2017.
 
In particular, Khazanah would continue increasing investments in the technology sector, which had made up 4% in 2016.
 
"Our mandate demands that we pioneer work overseas, but at the same time, we have to balance it with domestic investments, particularly in catalytic investments," Azman said, with reference to Khazanah's foreign exchange exposure.
 
Azman echoed market talk that the ringgit is undervalued by 10% to 12%.