SINGAPORE (July 2): Temasek Holdings typically reports its annual results in July but because of the Covid-19 outbreak which has disrupted business operations all over the world, many of its portfolio companies have postponed the reporting of their results.
As such, Temasek Holdings will delay its own reporting till September, says CEO Ho Ching in a Facebook post, where she also made clarifications on the “chatter” on Temasek’s portfolio amid campaigning for the country’s General Elections to be held next Friday.
Last July, Temasek reported a one-year return to shareholder of 1.49% for the financial year ended March 31 2019, and a ten-year return of 9%. Its sole shareholder is the Ministry of Finance.
Net portfolio value for the year ended March 31 2019 was $313 billion, up slightly from $308 billion the year earlier.
“Temasek works to build a resilient portfolio for the long term,” says Ho, wife of Prime Minister Lee Hsien Loong.
“This means steady and sustainable growth through the ups and downs of market cycles. It also means we think in terms of longer horizon trends - several of these trends are accelerated or accentuated by the current covid pandemic,” says Ho, perhaps hinting that the numbers this year will not look good.
She also reiterates Temasek’s long term approach in the way it manages the money. “We think in terms of the next 5 years to 2025, the next 10 years to 2030, and the next 40 years to 2050. This is part of the Temasek DNA to shape and reshape for a changing future. We also aim to build a fortress balance sheet in the event of a downturn,” says Ho.
Temasek has recently taken a more active role in its portfolio companies. For example, it led the $15 billion rescue of Singapore Airlines in March. Ho explains that it was more than helping the airline “tide over the cashflow crush of Covid”.
See: Temasek to lead $15 bil rescue of SIA
“Both the SIA and Temasek teams know clearly, the Temasek support is to provide the foundation for SIA to emerge stronger and better,” she said in the same post.
Temasek is also in the midst of helping Sembcorp Industries and Sembcorp Marine restructure and raise funds. Temasek is also making a partial offer to gain greater control of Keppel Corporation although there are recent reports suggesting this is under review.
According to Ho, Temasek is trying to beef up its own balance sheet further amid this bigger than expected downturn caused by Covid-19. “This has come in handy as we work through the Covid crisis, that is threatening to bring on global recession,” she says.
Paying taxes
In the same post, Ho notes that Temasek has been paying its taxes since its inception, and have given dividends to its shareholder, “just like any other company”.
Temasek Holdings has been contributing to the Singapore budget through the NII/NIR framework.
“Together, GIC, MAS and Temasek provide the largest single source of government revenues over the last 20 years. Without these, taxes would have to be raised for everyone,” she says.
Since contributions from Temasek were switched to the NIR framework, Ho says the contributions amount to over 20% of government operating revenues over the last five years, up from some 15% when the company was on the NII framework.
“An NII framework allows the government to spend up to 50% of dividends received from Temasek. The NIR contributions from Temasek, GIC and MAS are more the corporate income tax from businesses, more than personal income tax collected from taxpayers, more than revenue from GST, more than betting taxes, customs & excise duties, road tax and various other forms of taxes or fees,” she clarified.
Ho also touched on Temasek’s commitment to a more sustainable world by 2030.
Since 2019, the company has committed itself to carbon neutrality, by investing in carbon solutions, as well as existing and new portfolio companies to “support their transition to a carbon neutral world”
