PORT MORESBY, April 9, 2019: Papua New Guinea’s largest superannuation fund, Nambawan Super, today announced a profit for members of K274 million for 2018 against a fund asset size of K6.9 billion.
Nambawan Super Limited (NSL) Board Chairman Anthony Smaré said considering the challenging conditions experienced in 2018, the Board is pleased with this result for its members.
He explained that a combination of difficult economic conditions and foreign exchange pressure had led to strains on the performance of some of PNG’s major companies in which Nambawan Super has interests.
“Fortunately, the Fund’s focus on building up our annual cash returns from investments meant that our cash returns were able to withstand the impact of the reduction in valuations in some of our local and international investments. We saw our cash income from investments increase from K379 million to K445 million, but we had to withstand the impact of K59 million fair value loss on valuations and international market fluctuations and income tax of K33 million as well as operational costs.”
“This enables us to declare a 3.7% crediting rate, which will be paid to members’ accounts, including Retirement Savings Accounts.”
Mr Smaré said although the 3.7% crediting rate is below 2018 CPI of 4.3%, when Nambawan Super returns are averaged over the last 7 years, the Fund has averaged a return of 7.5% against average CPI of 4.6%, demonstrating that the Fund is able to achieve a consistent return for members above CPI, representing real growth in their contributions. The Fund’s consistent high returns, when compared to other superannuation funds, is continuing to attract more private sector employers to the Fund.
“NSL’s growing asset base and high contribution to withdrawal ratio puts the Fund in a strong position to explore new investment opportunities that are expected as PNG’s economic climate improves, especially with a range of big projects due to come online.”
“Our 2018 financial result endorses the effectiveness of Nambawan Super’s very disciplined investment strategy.”
Mr Smaré also noted that –
- Nambawan Super’s Net Asset Value now totals 6.9 billion.
- Net profit for the year 2018 was K274 million.
- The 3.7% return is an excellent return in challenging conditions.
- Management expense ratio was 1.06%.
- Total contributions for 2018 was K499 Million.
- Total member payouts was K252 Million.
Mr Smaré thanked the NSL’s Board and Management for their commitment to the Fund throughout 2018.
“Even in tough times, our members’ savings for their future have grown. I encourage all members to continue to save, no matter what the economic conditions are. Superannuation savings are one of the few things our members can rely on for their long-term financial wellbeing when they no longer have access to a regular fortnightly income.
Chief Executive Officer Paul Sayer commented further on NSL’s overall investment performance.
“One of the strategies NSL has been concentrating on is progressing a number of larger property developments and we are pleased to see Nambawan Plaza is now complete and getting ready to welcome the first tenants,” he said.
He said the strong focus on property investments is to ensure that there is an income yield coming directly to the Fund to help offset for movements in the valuations and currency fluctuations.
While it is important to have growth assets that provide higher returns over the long term, these may be more volatile. The actual income generated through investments like property helps create a buffer when capital gains are not as strong year to year.
Further, we expect that the integration of Laga Industries into Paradise Foods Limited, after its acquisition will see further contributions in dividends.
“So we’ve made sure that each year we continue to grow our members’ money from the profits we receive through interest, dividends, and rentals. Welcoming tenants mean our members will start to see the return on investment in 2019 from the outlay of Funds in previous years as rents are received,” Mr Sayer said.
Mr Sayer also assured members that Nambawan Super is making good progress on the Unfunded State Liability issue, highlighting that 2018 saw good results including The State’s commitment by allocating a budget to resolving the issue.
For more information visit www.nambawansuper.com.pg.
In Port Moresby
Nambawan Super Limited
Ms Anna Awasa
+675 309 5376
+675 309 5236