TRANSFORMATION PLAN: Market cap of the 20 top companies has tripled to RM425b, says Khazanah
GOVERNMENT-LINKED companies (GLCs) have strengthened their financial capacities and are on track to push themselves to be on par with local competitors or even become regional champions, even as their transformation programme comes to an end next year.
Khazanah Nasional Bhd managing director Tan Sri Azman Mokhtar said with the exception of one or two problem cases, the majority of the 60 companies have done well under the GLC Transformation Programme rolled out a decade ago.
“The bulk are doing well. There is a lot of wind in our sails,” Azman said after releasing the Khazanah Report 2013.
Market capitalisation of the 20 large GLCs (G20) tripled to RM425 billion as of May 16 2014 from RM140 billion a decade ago, while total shareholder return grew by 13.4 per cent per year.
The GLCs paid RM93 billion in dividends and RM57 billion in taxes from financial year 2004 to financial year 2013.
The Putrajaya Committee on GLC High Performance is finalising a stock-take exercise to assess the G20’s performance to date and propose recommendations.
Beyond 2015, the GLCs are expected to enhance their value creation through strong performance and execution.
Among the key takeaways from Khazanah Report 2013 are that Khazanah registered a higher pre-tax profit of RM3.1 billion for the financial year ended December 31 2013 from RM2.1 billion in the 2012 financial year, its net worth adjusted increased 19.1 per cent to RM103.5 billion from RM86.9 billion, and its realisable asset value rose 11.1 per cent to RM135.1 billion from RM121.5 billion.
Some of the key listed companies in Khazanah’s investment portfolio are Telekom Malaysia Bhd, Tenaga Nasional Bhd, CIMB Group Bhd, Axiata Group Bhd, IHH Healthcare Bhd, Malaysia Airports Holdings Bhd (MAHB) and UEM Sunrise Bhd.
Azman told a media briefing yesterday that Khazanah’s divestment programme is ongoing and has become part and parcel of its business.
“We have given a clear framework over the years that we will divest companies that are non-core and non-competitive.”
On the other hand, he said, there are also companies that have core holdings, such as TNB, MAHB or CIMB, in which the government does not need to own so many shares either. In such instances, the shares are divested or issued exchangeable sukuk.