Malaysia's Khazanah aims for $1.2 billion profit after first loss in a decade

KUALA LUMPUR (Reuters) - Malaysia’s sovereign wealth fund Khazanah Nasional Bhd said on Monday it is targeting a pretax profit this year of at least 5 billion ringgit ($1.2 billion), which would be its highest in eight years, after posting its first loss in a decade in 2018.

“For this year, we hope to achieve profitability of at least 5 billion ringgit,” Shahril Ridza Ridzuan, Khazanah’s managing director, said in comments to reporters at the fund’s annual conference.

Shahril did not elaborate on the reasons for the stronger outlook.

Last year Khazanah swung to a pretax loss of 6.3 billion ringgit from a profit of 2.9 billion ringgit in 2017, hit by higher impairments and lower dividend income.

Shahril also said the fund was on track to achieve this year’s target of cutting debt to 47 billion to 48 billion ringgit, from 50 billion ringgit. He added that over 3 to 5 years, the fund is aiming to reduce debt to 40 billion ringgit.

Khazanah is the majority shareholder of several government-linked companies including state utility Tenaga Nasional Bhd TENA.KL, banking group CIMB Group Holdings Bhd CIMB.KL Malaysia Airports Holdings Bhd MAHB.KL and Telekom Malaysia Bhd TLMM.KL.

Khazanah said in March the realizable asset value of its portfolio fell to 136 billion ringgit in 2018 from 157 billion ringgit a year prior.

(This story has been refilled to remove “record” in headline, changes “record pretax profit” to “highest in eight years” in first paragraph, after correction by company official)

Reporting by Liz Lee; Editing by Edwina Gibbs