Written: 12 March 2020

Papua New Guinea’s largest superannuation fund, Nambawan Super, today announced its largest-ever profit – K504 million – for members for 2019. 

Nambawan Super Chairman, Mr Anthony Smaré, said considering the very challenging conditions experienced in 2019, the Board was delighted with the result for the Fund’s 200,000 members.

“This enables us to declare a 7% crediting rate, which will be processed and paid to members’ accounts, including Retirement Savings Accounts, over the next few days so that it is reflected in members balances by next week,” Mr Smaré said.

He explained that the slow economy and foreign exchange pressure had led to strains on the performance of some of investments but Nambawan Super has a well balanced investment portfolio that allows the Fund to earn a stable income through low-risk assets that continue to perform in tough times.

“The positive results in challenging economic conditions illustrates Nambawan Super’s prudent and cautious stewardship of its investments,” Mr Smaré said.

Mr Smaré said the 2019 financial result endorses the effectiveness of Nambawan Super’s investment strategy.

“Return on investment is combination of cash returns – delivered through interest, rent and dividends – and valuations,” he said.

“Given asset valuation can be voliatile and vary widely from year-to-year, our investment team has worked to stablise Nambawan Super returns through stable interest and rent returns as part of a diversified investment strategy that focused on realised returns or cash returns”

“The focus on building cash returns through interest, rent and dividends reduces the chance of bad outcomes by having less exposure to assets that might change in value,

“In 2019 we saw our income from investments increase to K703m and after income tax and operational costs we are left with a net profit of K504 million – that will be distributed to members.”

Mr Smaré reflected on the performance of the Fund– 2013 to 2019.

“The Fund has doubled in size from K3.7 billion to K7.7 billion – achieved through sustained contributions and sound investment performance, despite difficult economic conditions.

“The membership has increased 50% – up from 130,000 to nearly 200,000 – which  includes our growing informal and SME member base.

“More than K200 million in Housing Advance payments have been distributed to more than 14,000 members – helping every day Papua New Guineans secure a home.

“The Fund has truly delivered great outcomes in growing the savings of every day Papua New Guineans and growing the country through our investment in PNG companies, properties and proejcts,” Mr Smaré said.

Mr Smaré urged members to continue to save.

“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.”

On behalf of the board Mr Smaré also thanked Nambawan Super’s Board, Executive and staff for the Fund’s hard work and contribution to the 2019 results.

Mr Smaré also noted the following 2019 results

  1. Nambawan Super’s Total Funds under management now is about K8 billion and Net Asset Value totalled K7.7 billion.
  2. Net profit for the year was a record K504 million, beating the previous record of K490 million set in 2007.
  3. The 7% return is excellent in challenging conditions.
  4. K770.54 million contributions received.
  5. K464 million benefits paid to member
  6. K27.99 million Housing Advance payments
  7. Members contributed K30 million voluntarily. With 39,976 members having saved voluntary Funds Under Management totalling K173.61million

Mr Smaré noted the following results over 2013 – 2019, the years he has been Chairman of the Fund

  1. The accumulative balance of Voluntary Contribution has increased by K160 million from K14 million to K174 million
  2. Members have receive K2.3 billion in benefit payments
  3. Real returns to members have been 7%, beating CPI of 5.1% for the same period

Highlights for NSL in 2019:

  • Opening of new Nambawan Super Plaza, including Crowne Plaza Residences and the Penthouse Tower which set the benchmark in luxury accommodation standards in PNG
  • NSL exited from Kina Investments after being the largest single source of capital for Kina Bank since taking a cornerstone position in the initial public offering (IPO) in 2015. During the past 4 years, Kina shares have performed very well, rising in value and making a good returns for the Fund and its members. The positive market reaction signalled that investors recognise Kina Securities Limited has reached a new stage in its development, and that Nambawan Super is no longer required as the largest shareholder in the company
  • Biggest single Investor in BSP (Largely exposed to PNG Economy) returned another positive return to members
  • New investment property, Rangeview is creating jobs – with 680 Papua New Guineans working on the site, creating the next PNG owned development, where all operating profits will come back to members.
  • Significant progress on the State’s payment of pre-2009 employer contributions with K235 million received and distributed to member accounts.
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