44 AL-SALAM REIT Table 3: Performance Benchmarks Performance Benchmarks FY2021 FY2022 Commentary i. Management expense ratio (%) 0.63 0.69 Management expense ratio of 0.69% increased by 10% due to decline in NAV. ii. Distribution Yield (%) 4.74 6.76 Distribution yield has increased from 4.74% to 6.76% due to higher DPU and lower closing price. iii. Total Return (%) (7.08) (16.95) Total return for the financial year of negative 16.95% (FY2021: negative 7.08%) contributed by 23.71% capital loss (FY2021: capital loss of 11.82%) plus distribution yield of 6.76% (FY2021: 4.74%) iv. Average annual total return (5 years) (%) (8.59) (11.78) The 5-year average annual total return decreased due to negative return recorded in 2018, 2020, 2021 and 2022. v. Average annual total return (3 years) (%) (9.85) (17.45) The 3-year average annual total return decreased due to negative return recorded in 2020, 2021 and 2022. vi. NAV per unit (after income distribution) (RM) 1.0003 1.0881 NAV per unit increased by 8.8% mainly due to gain in fair value adjustment of investment properties. Notes: i. T he ratio of expenses incurred in operating Al-Salām REIT of RM4.1 million (FY2021: RM3.8 million) to the weighted average NAV of Al-Salām REIT of RM592.3 million (FY2021: RM599.3 million). ii. Based on DPU of 2.50 sen (FY2021: 2.30 sen) divided by its closing price as at 31 December 2022 of RM0.37 (FY2021:RM0.485). 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 RM51.1 million in FY2022 (FY2021: RM36.6 million). This was mainly due to higher collection from tenants and lower rental support to tenants. Investing activities Al-Salām REIT spent RM0.03 million for investing activities in FY2022 (FY2021:RM0.3 million). Investing activities relates to acquisition of equipment, capex and pledged deposit with licensed banks Financing activities Net cash used in financing activities during FY2022 was RM43.0 million, largely due to payment of Islamic financing costs of RM26.6 million and income distribution of RM16.2 million. Therefore, as at 31 December 2022, the Fund’s cash and cash equivalent position stood at RM37.1 million, an increase of RM8.1 million from RM29.0 million. MANAGEMENT DISCUSSION AND ANALYSIS STATEMENT OF FINANCIAL POSITION Al-Salām REIT’s total asset value increased to RM1.30 billion as at 31 December 2022 (FY2021: RM1.25 billion) mainly due to fair value gain from the revaluation on investment properties of RM 46.7 million.
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