Nambawan Super Limited, today announced a net profit of K89 million from its 2020 financial results, which were significantly impacted by the Corona virus and an embattled PNG economy.
The result allowed the Fund to declare 1% interest which has been credited to members’ accounts.
Nambawan Super Limited Board Chairman, Reg Monagi, said the extraordinarily difficult economic conditions, that were worsened by the global Corona virus pandemic, heavily impacted values and returns for many of the Fund’s key investments in the PNG economy.
Mr Monagi said while the 2020 result will be disappointing for members, the primary cause was the reduced values of some of the Fund’s well-established PNG investments, that are expected to bounce back when economic conditions improve.
“These business and properties are still important to our investment mix, and the Fund believes as economic conditions improve these asset values will bounce back,” Monagi said.
“The assets are still held by the Fund for the members and at this stage, we aren’t considering selling or divesting them from our portfolio.
“Despite the low crediting rate, the Fund’s net assets grew by 6.2% due to continued strong member contributions and now stands at K8.14 billion.
“Members must know that their funds are safe and that Nambawan Super manages a diverse and balanced portfolio of investments,“ he said.
Despite a lower than average investment performance in 2020, compound average returns over the past 5-years have been 5.7%, almost a full percent over CPI for the period, which means real returns to members.
“2020 was a challenging year with the sharpest global economic decline in a century and at times the risk of negative return was considered a possibility.
“The Fund took steps to reduce the risk of a negative return, including delaying non-essential projects and tightening expenditure wherever possible.
“The tough economic climate has carried over to 2021, but we will continue to manage the Fund to maximise returns within our risk tolerance.
“While some years returns will be greater or lower than others, in the long term members’ retirement savings will grow.
“Indeed, for most members, the time to retirement is many years, and in that time they should experience varying returns but long-term gains,’ Monagi said.
Mr Monagi also noted that –
• Nambawan Super’s Net Asset Value now totals K8.14 billion up from K7.6 billion,
• Net profit for the year 2020 was K89 million
• Cash profit from investments
• 1% return
• The management expense ratio was 1.05%
• Total contributions for 2020 were K893 million, an increase from K832 million in 2019
• Total member payouts were K525 million, a decrease from K546 million
• Fund membership grew to 207,986
Mr Monagi added: “In these tough times, I would encourage all members to continue to save and to not be distracted, from saving, by the changing economic climate. Saving remains critical to the long-term financial survival of all our members as superannuation is long term.”