Tabung Haji first half net profit eases to RM1.22 billion on slower property market

KUALA LUMPUR (Sept 8): Lembaga Tabung Haji (TH) reported a slight drop of 2.2% in net profit to RM1.22 billion after accounting for expenses and zakat for the six-month period to June 30, 2021, against RM1.25 billion for the same period in 2020.

In a statement today, TH said the lower profit was partly affected by property investments as the property market was significantly affected by the global pandemic.

"Total income for the first six months ended June 30, 2021 reduced slightly to RM1.52 billion (before zakat deduction) compared with RM1.55 billion for the same period in 2020, a minimal 1% reduction that reflected its resilience during difficult economic and business conditions," it said.

TH said the bulk of its income was derived from its fixed income investments that contributed RM942.6 million for the first half period, accounting for 62% of its total income.

"Investments in equities contributed RM219.9 million for the period under review, an improvement from RM184.2 million in the same period in 2020. Equity investments accounted for 14% of total income.

"Property investments provided an income of RM174.7 million, followed by money market investments with an income of RM161.8 million," it said.

However, TH said its financial position remained strong with assets totalling RM85.92 billion, exceeding liabilities of RM83.73 billion as of June 30, 2021.

"Operating expenses were flat compared against the same period last year, mainly due to prudent cost management amid challenging economic conditions. TH is also taking continuous measures to optimise expenditure to ensure its cost is managed efficiently.

"As of June 30, 2021, total deposit amounted to RM81.14 billion, its highest level since TH was established 58 years ago. TH had 8.3 million depositors as of June 30, 2021," it said.

The resilience of TH's financial results reflects a cautious and opportunistic investment approach with robust liquidity management, steered by its strategic asset allocation (SAA) to minimise the impact of short-term fluctuations in the market.

"The SAA underscores TH's mandate of managing savings for hajj, which is a long-term commitment by the depositors. More than half, or 58% of TH assets, are earmarked for fixed income investments like sukuk, which provides stable and secure returns over the long term.

"TH's equity investments also outperformed the benchmark Bursa Malaysia Hijrah Shariah Index which fell 7.45% in the first half period. It focused on stocks with good fundamentals, with defensive qualities and good dividend track record," it said.

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