A L - S A L Ā M R E I T A N N U A L R E P O R T 2 0 2 1 40 MANAGEMENT DISCUSSION AND ANALYSIS OVERVIEW OF AL-SALĀM REIT Table 3: Performance Benchmarks Performance Benchmarks FY2020 FY2021 Commentary i. Management expense ratio (%) 0.66 0.63 Management expense ratio of 0.63% decreased by 5% due to decline in NAV. ii. Distribution Yield (%) 3.78 4.74 Distribution yield has increased from 3.78% to 4.74% due to higher DPU of 2.30 sen per unit (FY2020: 2.08 sen per unit) offsetted by lower closing price of RM0.485 (FY2020: RM0.55). iii. Total Return (%) (28.32) (7.08) Total return for the financial year of negative 7.08% (FY2020: negative 28.32%) contributed by 11.82% capital loss (FY2020: capital loss of 32.1%) plus distribution yield of 4.74% (FY2020: 3.78%) iv. Average annual total return (3.05) (8.59) The 5-year average annual total return decreased due to (5 years) (%) negative return recorded in 2017, 2018, 2020 and 2021. v. Average annual total return (11.62) (9.85) The 3-year average annual total return decreased due to (3 years) (%) negative return recorded in 2018, 2020 and 2021. vi. NAV per unit 1.0178 1.0003 NAV per unit decreased by 1.7% mainly due to loss in fair (after income distribution) (RM) value adjustment of investment properties. Notes: i. The ratio of expenses incurred in operating Al-Salām REIT of RM3.8 million (FY2020: RM4.1 million) to the weighted average NAV of Al-Salām REIT of RM599.3 million (FY2020: RM620.2 million). ii. Based on DPU of 2.30 sen (FY2020: 2.08 sen) divided by its closing price as at 31 December 2021 of RM0.485 (FY2020: RM0.55). iii. Total return represents the change in unit price during the year plus distribution yield for the year. iv. Average annual total return is the sum of the return rates of Al-Salām REIT over a given number of years divided by that number of years. v. Average annual total return is the sum of the return rates of Al-Salām REIT over a given number of years divided by that number of years. vi. Net asset value per unit is determined by deducting the value of all Al-Salām REIT’s liabilities from the total asset value divided by total issued units. STATEMENT OF CASH FLOWS Operating activities Net cash generated from operating activities was RM36.6 million in FY2021 (FY2020: RM28.4 million). This was mainly due to lower rental support to tenants offsetted by extended collection period from tenants. Investing activities Al-Salām REIT spent RM0.3 million for investing activities in FY2021 (FY2020:RM1.7 million). Investing activities relates to acquisition of equipment, capex and pledged deposit with licensed banks.
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