26 AL-SALĀM REIT MANAGEMENT DISCUSSION AND ANALYSIS FINANCIAL AND BUSINESS REVIEW ANNUAL REPORT 2023 STATEMENT OF FINANCIAL POSITION Al-Salām REIT’s total asset value increased to RM1.32 billion as at 31 December 2023 (FY2022: RM1.31 billion) primarily owing to fair value gain from the revaluation on investment properties of RM12.6 million. Table 3: Performance Benchmarks Performance Benchmarks FY2022 FY2023 Commentary i. Management expense ratio (%) 0.69 0.72 Management expense ratio of 0.72 increased by 4.3% due to an increase in fees and NAV. ii. Distribution Yield (%) 6.76 2.53 Distribution yield has decreased from 6.76% to 2.53% due to lower DPU and higher closing price. iii. Total Return (%) (16.95) 30.90 Total return for the financial year of 30.9% contributed by 28.37% capital gain (FY2022: capital loss of 23.71%) plus distribution yield of 2.53% (FY2022: 6.76%). iv. Average annual total return (11.78) (3.12) The 5-year average annual total return increased due to (5 years) (%) positive return recorded in 2023. v. Average annual total return (17.45) 2.29 The 3-year average annual total return increased due to (3 years) (%) positive return recorded in 2023. vi. NAV per unit 1.0881 1.1135 NAV per unit increased by 2.3% mainly due to gain in fair value (after income distribution) (RM) adjustment of investment properties. Notes: i. The ratio of expenses incurred in operating Al-Salām REIT of RM4.5 million (FY2022: RM4.1 million) to the weighted average NAV of Al-Salām REIT of RM636.0 million (FY2022: RM592.3 million). ii. Based on DPU of 1.20 sen (FY2022: 2.50 sen) divided by its closing price as at 31 December 2023 of RM0.475 (FY2022:RM0.370). 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 RM42.6 million in FY2023 (FY2022: RM51.1 million). This was mainly due to lower collection from tenants. Investing activities Al-Salām REIT spent RM1.6 million for investing activities in FY2023 (FY2022:RM0.03 million). Investing activities relates to acquisition of equipment, capex and pledged deposit with licensed banks.
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