Singtel Starts Business Review After Indicating Exceptional Loss

Singapore Telecommunications Ltd. has begun a strategic review of some businesses after saying it will book a charge of S$1.21 billion ($907.1 million) in its upcoming annual results.

The review will focus on reinvigorating core business, new growth engines, reallocation of capital and unlocking of value, Yuen Kuan Moon, Singtel’s group chief executive officer, said at a media briefing. Some of the digital businesses have taken longer than expected to scale up, he added.

Southeast Asia’s biggest telecom operator has written down impairment charges against its investments in advertising platform Amobee and cybersecurity company Trustwave and sees both companies needing a longer cycle to achieve their goals, it said in a statement issued before the briefing. The company’s Australian unit, Optus, has also undertaken a review and will book similar charges.

The review marks the first major overhaul at the company since Yuen took over as CEO in January. It comes at a time when the coronavirus pandemic has crimped mobile service revenue for some firms, while accelerating the use of technology and data globally as millions of people working online from their homes. Singtel’s shares fell as much as 2.5% on Friday to their lowest level since March 24.

Singtel Starts Business Review After Indicating Exceptional Loss

Citigroup Inc. said last month that Yuen can announce some strategic changes alongside the company’s results as the management is likely to plot a new direction. Singtel has various options to consider, such as divesting loss-making businesses, spinning off some infrastructure assets and creating value in underappreciated assets, analyst Arthur Pineda wrote in a mid-April note.

“This review could involve the restructuring of product or business segments, a full or partial divestment or business combinations with other industry players,” Yuen said in the statement. “We are open to all types of strategic partnerships and deals.”

Arthur Lang, Singtel’s group chief financial officer, said at the briefing that more than 90% of the charges taken by the telecom operator won’t erode cash holdings and the company will hire financial advisers for the review.

Singtel will give further details on the group’s strategic direction and priorities on May 27, when it announces full-year results, according to its statement.

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