KUALA LUMPUR: Lembaga Tabung Haji (LTH) has shown signs of business recovery after a challenging 2018, and that the pilgrim fund board's conservative cost-cutting approach and business turnaround plan to manage its debt has proven to be a sound strategy moving forward.
This is after LTH posted a sustainable net profit of RM440 million as well as revenue of RM623 million for the first quarter ended March 31, 2019.
The pilgrimage fund said this achievement is the result of the successful completion of its restructuring process implemented end December 2018.
In addition, the fund board’s financial position have also strengthened within the same period, with total assets exceeding total liabilities of RM1.2 billion, supported by improved portfolio investment performance.
With these positive earning numbers, LTH is forecasting revenue to continue increase from the second quarter onward with the issuance of sukuk by Urusharta Jamaah Sdn Bhd (UJSB) - a special purpose vehicle (SPV) set up by the Ministry of Finance to receive the pilgrims fund’s underperforming assets.
Further, the sukuk is expected to provide a return of almost RM800 million a year with the implementation of a new investment adjustment process.
To recap, UJSB was setup to take over RM19.9 billion worth of underperforming properties and equities as part of LTH’s restructuring exercise, with some 80 per cent of the assets transferred are equities, with properties making up the remaining 20 per cent.
On a positive note, LTH also noted that over 91,000 new savings accounts were opened during the first quarter, pushing the total number of depositors to 9.3 million.
"As an institution that helps Muslims save for the haj, the fund management operations remained smooth without any interruption during the quarter,” LTH said in a statement.
“LTH recorded new savings of RM4.3 billion, while withdrawals accounted for RM4.6 billion.”
In addition to the earnings, LTH had also executed extensive preparations for the next hajj season which includes improving the pre-departure process in the country, shorten the waiting period at the Jeddah and Madinah haj terminals as well as providing air-conditioned tents in Arafah to provide comfort and deter health-related risks due to the hot weather.
The first haj flight is scheduled to depart on 4 July 2019, while the last flight for the year would be on 4 August.