KUALA LUMPUR: Lembaga Tabung Haji (TH) has recorded lower investment income of RM1.52 billion during the first half of this year (1H21) from RM1.55 billion in the same period in 2020.
TH said the minimal one per cent reduction reflected its resilience during difficult economic and business conditions.
The bulk of the pilgrim fund's income was derived from its fixed income investments that contributed RM942.6 million for 1H21, accounting for 62 per cent of the 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 per cent of total income. Property investments provided an income of RM174.7 million, followed by money market investments with an income of RM161.8 million," TH said in a statement.
After accounting for expenses and zakat, TH reported a net profit of RM1.22 billion for the six-month period, a slight drop of two per cent against RM1.25 billion previously.
"The lower profit was partly affected by property investments as the property market was significantly affected by the global pandemic," it said.
TH said its financial position remained strong with assets totalling RM85.92 billion, exceeding liabilities of RM83.73 billion as at June 30, 2021.
Operating expenses were flat against the same period last year, mainly due to prudent cost management amid challenging economic conditions.
Group managing director and chief executive officer Datuk Seri Amrin Awaluddin said TH disciplined approach to investment reflected its commitment to safeguarding depositors' interest.
"We are obviously saddened not to be able to organise the hajj this year, but we are taking all the necessary steps to improve upon preparations for hajj with new safety rules and requirements.
"TH remains cautious of the second half of 2021 as new highly infectious Covid-19 variants emerge, but the rapid pace of vaccinations could be the silver lining for the economy," said Amrin
TH is taking continuous measures to optimise expenditure to ensure its cost is managed efficiently.
"As at June 30, 2021, total deposits amounted to RM81.14 billion, its highest level since TH was established 58 years ago.
"TH has 8.3 million depositors as at 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 the 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 per cent of TH's 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's Hijrah Shariah Index which fell 7.45 per cent in 1H21.