LTAT chairman General Tan Sri Mohd Zahidi Zainuddin (left) with chief executive Nik Amlizan Mohamed at a press conference to announce its FY18 results today. (Photo by: Kenny Yap/The Edge)
KUALA LUMPUR (Sept 30): Lembaga Tabung Angkatan Tentera (LTAT) has today declared its lowest-ever dividend of 2%, compared with a minimum of 6% paid over the past four and a half decades.
"A point to make is that no entity should pay dividends without funds to do so in place," LTAT chief executive Nik Amlizan Mohamed told reporters at a press conference here today.
When asked if LTAT could return to giving out dividends of at least 6% this year, its chairman General Tan Sri Mohd Zahidi Zainuddin said: "We would definitely work hard and be responsible to ensure that our soldiers get the right returns in the future. Of course it will take some time. 2019 will be another challenging year for us. But I think come 2020 we should be plain sailing."
"I wish we could announce higher dividends, but it is much better than announcing dividends that we cannot afford to pay," he added.
Meanwhile, LTAT's gross income was down 19.8% at RM423.9 million in the financial year ended Dec 31, 2018 (FY18), from RM528.4 million in FY17. Its unaudited net profit for FY18 stood at RM221 million, 51.9% lower than FY17's RM459.5 million.
LTAT registered positive retained earnings of RM38.7 million for FY18, compared with accumulated losses of RM170.8 million for FY17.
Nik Amlizan explained that LTAT's earnings were negatively impacted by the implementation of the Malaysian Financial Reporting Standard (MFRS), which consequently resulted in impairment amounting to RM116.7 million for FY18 including impairment for a large investment totalling RM55 million, as well as an expected credit loss of RM61.5 million.
She added that there was also impairment on Boustead Heavy Industries Corp Bhd of RM60.4 million.
While she noted that LTAT is overly reliant on Boustead Holdings Group for returns — given its high exposure, saying that it is not reflective of best practices of investment structure and policies, Nik Amlizan, however, said LTAT still believes that there is still deep value in Boustead.
"We are patient capital. So, we will not rush into making irresponsible decisions," she said.
Going forward, LTAT will be reviewing all other investments that it has in line with the market valuation, and any impairment necessary, said Nik Amlizan, adding that LTAT has made the review and impairments needed for the "big items".
She added that it will also be very premature to discuss the disposal of any assets at this current juncture. "We have no intention of selling any of our assets, [but] only if it benefits our members," said Nik Amlizan.
As at end-2018, the total assets under management stood at RM9.4 billion.