Khazanah Nasional Berhad, Malaysia's sovereign wealth fund, announced Monday a record 7.36 billion ringgit ($1.79 billion) in profits from operations in 2019, on the strength of higher divestment gains and strong investment returns.
In a news release, the Kuala Lumpur-based fund said it likewise strengthened its position during the year by cutting expenses by 28.2% and reducing debt by 17%.
The gain compares to a loss of 6.27 billion ringgit the year before.
The fund did not disclose its assets.
The results reflected the first full year since the government "refreshed" Khazanah's mandate to focus less on strategic investments and more on growing the country's long-term wealth, the news release said.
A "restructuring and reorganization" announced in 2018 resulted in the sovereign wealth fund setting up a commercial fund, focused on growing financial assets and diversifying revenue sources for the country, and a strategic fund tasked with holding assets that can bring long-term economic benefits for the country.
Monday's news release said the commercial fund, with a net asset value of 73.1 billion ringgit at the end of 2019, had generated a time-weighted rate of return of 8.3%, beating its long-term targeted rate of return equivalent to the Malaysian consumer price index plus 3% on a five-year rolling basis.
The news release didn't provide a figure for that rolling five-year figure for Malaysian CPI plus 3%, and a Khanazah spokesman couldn't immediately be reached for comment.
"The strategic fund achieved financial and strategic outcomes for specific assets despite the sluggish market in 2019," according to the news release, citing progress made during the year in addressing challenges facing key holdings such as toll road operator PLUS Malaysia and Malaysian Airlines.
The strategic fund "generated an overall return of 2.9%," the news release said. It didn't provide a figure for that fund's targeted rate of return of the 10-year Malaysian government securities yield on a five-year rolling basis, and it didn't say what the strategic fund's value was at the end of the year.
Managing Director Shahril Ridza Ridzuan warned in the news release that the COVID-19 outbreak is muddying an already uncertain outlook for the global economy in 2020. He concluded that "it will be extremely difficult to achieve the same levels of success as 2019."