KAML generates net profit despite challenges

KINA Asset Management Ltd (KAML) generated a net profit after tax of K119, 133,000 (K0.12 million) last year despite a difficult global political and economic environment.
Chairman Sir Rabbie Namaliu speaking during the company’s annual general meeting in Port Moresby yesterday said this was down from K8.2 million or 98.6 per cent from the previous year (2017).
He said it was a challenging year but the company performed well and delivered a total investment return of 2.2 per cent.
Sir Rabbie said the company’s result was achieved in year marked by increasing geo-political uncertainty most notably the United States-China trade crisis and the extension of the British Exit (Brexit) deadline in Europe.
He also attributed the company’s performance to the destructive earthquake that affected parts of Hela and Southern Highlands last February.
Sir Rabbie said despite the earthquake and falling prices for key export commodities, equity markets managed to rise by 4.8 per cent.
“The company’s net assets at year’s end stood at K61.4 million, a fall of 3.2 per cent from K63.4 million at the end of 2017,” he said. “Capital losses arising from falls in the prices of most of the company’s share holdings amounted to K2.7 million, and the 6.1 per cent appreciation of the PNG Kina against the Australian dollar resulted in currency losses of K2.1 million,” he said.
“Offsetting these losses was a strong rise in dividend and interest income to K4.2 million.”
Sir Rabbie also noted that Bank South Pacific (BSP) had maintained its position as the biggest driver of the company’s investment performance.
“Total return from BSP was 22.2 per cent, comprising a dividend yield of 13.9 per cent and an 8.3 per cent increase in share price,” he said.
“BSP is the company’s largest single investment representing 23.4 per cent of the portfolio at year’s end.”
He said during the year, the company increased its holdings in Telstra, Credit Corporation, Kina Securities and Oil Search.
“Overall, the company’s transaction activity was light, reflecting the fund manager’s view that markets were approaching full value as deteriorating global market conditions saw an inevitable rise in volatility,” Sir Rabbie said.