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Tuesday October 12, 2010

CEO: 1MDB’s profit derived from stakes sale

Effective management of treasury function funds also helped

PETALING JAYA: 1Malaysia Development Bhd’s (1MDB) RM425mil net profit for its first financial year, which ended March 31, 2010 was derived mostly from disposal of investments in a joint venture (JV) with PetroSaudi International Ltd.

1MDB chief executive officer Shahrol Halmi told Bernama that effective management of treasury function funds also contributed to the company’s net profit.

“It is our strategy to invest while seeking the best returns for our investment.

“There is a continuous need to be disciplined to generate returns when it comes to managing funds meant for future strategic investments,” he said.

Shahrol said the company has “a solid partnership” with PetroSaudi and leveraged on PetroSaudi’s strong international network in the energy industry worldwide region to attract investment into Malaysia.

“We prefer a partnership of inclusiveness that allows our partners to team up with others as long as they serve the larger interest of promoting economic growth,” he added.

Shahrol said the company maintained a significant investment in PetroSaudi through a hybrid murabahah Islamic partnership even after the divestments of investments in the JV.

“This ensures a good partnership for 1MDB as we are able to receive a sturdy stream of cashflows in the form of an annual fixed profit share which is positive in ensuring that our financial obligations are met while also having the option and ability to capture equity-type returns,” he said.

Shahrol said the public could obtain a copy of the company’s annual report once its been lodged with the Companies Commission of Malaysia.

He said 1MDB had never received any cash injection from the Government beyond the initial RM1,000,002 in paid-up capital.

“There is absolutely no truth that the Government has injected the purported RM10bil to RM15bil in cash into 1MDB and neither have we raised RM15bil in loans as indicated by some quarters.

“As an example, 1MDB’s RM100mil commitment for its corporate social responsibility programme is solely derived from our earnings,” Shahrol said. — Bernama

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