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Temasek portfolio at record high of S$215 billion

Portfolio more than tripled over 10 years from trough of S$61 billion at end March 2003

4 July 2013

  • Net portfolio value:

    •    31 March 2013: S$215 billion  
    •    31 March 2012: S$198 billion  
    •    31 March 2011: S$193 billion  
    •    31 March 2010: S$186 billion  
    •    31 March 2009: S$130 billion

 

  • S$ Total Shareholder Return (%) as at 31 March 2013

    •    One-year   : 8.86%
    •    Three-year   : 4.94%
    •    10-year   : 13%
    •    20-year   : 14%
    •    Since 1974   : 16%

    

  • Cumulative investments & divestments for the year

    •    Investments: S$20 billion  
    •    Divestments: S$13 billion  

      

  • Group shareholder equity

    •    31 March 2013: S$169 billion  
    •    31 March 2012: S$158 billion  
    •    31 March 2011: S$155 billion  
    •    31 March 2010: S$150 billion  
    •    31 March 2009: S$118 billion  

 

  • Group net profit

    •    31 March 2013: S$11 billion  
    •    31 March 2012: S$11 billion  
    •    31 March 2011: S$13 billion  
    •    31 March 2010: S$5 billion  
    •    31 March 2009: S$6 billion  

 

 

“We are optimistic about Asia’s long term growth”, says Temasek Chairman

 

Shaping a Resilient Portfolio

  • Singapore at 30% of portfolio; China at 23%

  • North America and Europe now 12% of portfolio, up from 8% two years ago

Investing Actively in Key Sectors

  • S$4b net investments in energy and resources for the year

  • Significant investments in life sciences, consumer, and technology sectors

 

Singapore, Thursday 4 July 2013 –Temasek Holdings (Private) Limited (“Temasek”) today released the tenth edition of our annual performance review, Temasek Review 2013 – Beyond Investing.

At the financial year end of 31 March 2013, Temasek delivered a record net portfolio value of S$215 billion, with a net cash position; up S$17 billion from S$198 billion the previous year.

 

Mr S Dhanabalan, Chairman, Temasek, said, 

“Last year, there were some signs of a recovery in the global economy. The severe disruptive risks from the global financial crisis subsided, but structural risks have not been completely resolved. 

Despite the turmoil over the last decade, the Temasek portfolio value more than tripled in Singapore dollar terms from a trough of S$61 billion in March 2003, when the SARS epidemic hit Asia.

While we have increased our exposure in North America and Europe, Asia continued to attract the largest proportion of our investments. We remain anchored in Asia and are optimistic about its long term growth.”
 

Total Shareholder Return 

A key performance measure for Temasek is Total Shareholder Return (TSR), which excludes capital injections from, and includes dividends to, Temasek’s shareholder. This measures the compounded annual returns to our shareholder, the Government of Singapore.

In Singapore dollar terms, our TSR for the year was 8.86%. Our three-year TSR was 4.94% compounded annually. Longer term 10-year and 20-year TSRs were 13% and 14% respectively. TSR since Temasek’s inception in 1974 was 16%.

 

Shaping a resilient portfolio over the decade

Temasek has been an active investor over the past decade. Our investments totalled S$159 billion, with divestments at S$100 billion over the period.

Newer investments made after March 2003 delivered annualised returns of 20% to Temasek over the last 10 years. These newer investments include additional investments in long-held portfolio companies such as DBS and CapitaLand, where we participated in their rights issues or other capital raising programmes. Our older portfolio of investments such as our shares held as at 31 March 2003 in SingTel and Singapore Airlines, delivered 16% annualised returns to Temasek over the past 10 years.

We continue to invest in sectors that are proxies to transforming economies with long term growth potential, in Asia and other regions.

During the year, Temasek invested a total of S$20 billion and divested S$13 billion. Net investments for the year amounted to S$7 billion. Net investments of S$4 billion were made in the energy and resources sector, and in North America and Europe.

These investments included:

  • Repsol, a Spanish-listed integrated oil company with substantial international operations;
  • Cheniere Energy, a US company which is building a liquefied natural gas export terminal;
  • Venari Resources, a US oil company focused on deep water exploration in the Gulf of Mexico;
  • Turquoise Hill Resources, a Canadian-listed international mining company.

Temasek also participated in the bond cum warrants rights issue of Olam International, a global leader in the supply chain management of agricultural products and food ingredients. We subsequently increased our stake to 23% in the company, as at 31 March 2013.

Financial services continued to be our largest portfolio exposure by sector, at 31%. We increased our stake in the Industrial and Commercial Bank of China, the world’s largest bank by market capitalisation; and deepened our exposure to the Asian insurance sector with stakes in AIA and Ping An Insurance.

On a geographic basis, Singapore and China remained our largest exposures at 30% and 23% respectively, based on underlying assets, which included the assets in our portfolio companies.

Our exposure to North America and Europe grew to 12% during the year, arising from investments in the energy and resources sector, and other investments such as Evonik, a German specialty chemicals company.

Investments in growth markets included PT Matahari Putra Prima Tbk, a leading operator of hypermarkets in Indonesia, and a stake in Halkbank, a Turkish bank with a leading market share in small and medium-sized enterprise (SME) banking.

During the year, our joint venture partnerships with Khazanah Nasional Berhad made good progress, in Singapore and Iskandar Malaysia, Johor. We also signed a Heads of Agreement to partner with Iskandar Waterfront Holdings Sdn Bhd and CapitaLand to develop a 71-acre land parcel in Danga Bay, Johor.

Key divestments in the last financial year included Asia Pacific Breweries and Bharti Infratel. Temasek also divested 2.5% of SingTel, which brought our stake to 52%. SingTel remained the largest single investment in our portfolio, at 14% of our portfolio value, down from 30% in March 2004.

At the end of our financial year, Asia formed 71% of our portfolio based on underlying assets. Excluding Singapore, Asia was 41% of our portfolio.

 

Ms Ho Ching, Executive Director and CEO, Temasek, said,

“We think and act as owners of the Temasek portfolio. We are almost entirely invested in equities. This means a lot more year to year volatility, as we have seen over the last 10 years. We are prepared to ride through the large mark-to-market volatility on our portfolio value, because a portfolio of mostly equities also means we expect higher returns over the long term from our portfolio. 

While Asia and Latin America will continue to be focus areas for us, we do see increasing opportunities in North America and Europe. We are setting up offices in London and New York to support our investment activities in these markets.”

 

Building future growth engines

Temasek embraces the pioneering spirit of enterprise. Beyond investing, we are working to build and nurture new growth engines.

To complement our investing activities and further pursue our commitment to deliver sustainable returns over the long term, Temasek has established the Enterprise Development Group (EDG). This will complement our Investment and Markets Groups, which are supported by our Corporate Group.

Together with our existing platforms and initiatives, EDG will explore opportunities ranging from investments in early stage businesses to the development of new business models that tap into emerging growth areas.

For instance, during the year, we established Pavilion Energy to invest in the region’s growing energy needs, especially around the liquefied natural gas supply chain. With an initial capital commitment of US$1 billion, Pavilion Energy is an independent Temasek portfolio company with its own board, management and operating capabilities.

Heliconia Capital Management (“Heliconia”), set up in collaboration with the Singapore Ministry of Finance, invested in two SME growth funds, and co-invested alongside them in Singapore-based companies.

We increased our commitment to Vertex, our early stage venture capital firm.
Vertex and Heliconia complement each other by providing equity capital at different stages of development for smaller companies.

We also partnered with several banks and insurance companies to establish Clifford Capital, which commenced operations in late 2012. Clifford Capital provides long term project finance loans to Singapore companies expanding overseas.
 

Planting trees in more ways than one

Temasek is an active owner investor, a forward looking institution and a trusted steward. Guided by our Temasek Charter, we are committed to think beyond today, beyond investing. We are building our institution and stakeholder groups, as we continue to grow as an owner investor.

This year marks the tenth edition of our Temasek Review, which we have voluntarily published since 2004. This edition also marks the 39th anniversary since our founding in 1974. The Temasek Review, together with credit ratings and our Temasek Bonds, are public markers of our credit quality and financial discipline – they instil accountability and professionalism, and demonstrate our willingness to be assessed and measured.

Temasek continues to be rated AAA/Aaa by Standard & Poor’s and Moody’s, respectively, since our inaugural ratings in 2004. During the year, we issued two long-dated US dollar Temasek Bonds totalling US$1.7 billion.

Ten years ago, we formalised our policy of sustainable philanthropic giving.

We share returns, above our risk-adjusted hurdle, by endowing various non-profit philanthropic organisations, each with specific mandates. These endowments support programmes that develop people and rebuild lives, through education, healthcare, knowledge and a sense of community.

Over the decade, our endowments and philanthropic entities have touched the lives of over 100,000 people in Singapore and beyond.

Our Temasek staff volunteer actively.  Apart from time and care, our people also raise funds for various charities, with Temasek providing matching donations.

 

Mr Lim Boon Heng, Board Director, Temasek, noted,

“There is a Chinese proverb which says that trees planted by one generation provide shade for the next. Likewise, the trees planted by Temasek today will shade generations tomorrow.”

He further elaborated:
“The dividends Temasek pays to our shareholder are supported by investment returns. Our dividend contribution adds to the budget of the Singapore Government, and helps to support programmes that deliver more social good to the public.

As an investor with a long term view, Temasek is also invested in successful companies that provide jobs and livelihoods to thousands of people in Singapore, and many more in Asia.”
 

As Mr Dhanabalan noted in Temasek Review 2013 – Beyond Investing 

“For a society to thrive and its people to grow, each generation must plant trees to shade the next. We in Temasek work hard to plant trees in more ways than one.” 

By delivering returns over the long term, Temasek will continue to contribute to Singapore and the wider community, beyond today and beyond investing.

 -- END --

 


About Temasek

Incorporated in 1974, Temasek is an investment company based in Singapore, with 11 affiliates and offices in Asia and Latin America. Temasek owns a S$215 billion portfolio as at 31 March 2013, mainly in Singapore and Asia.

Temasek's investment themes centre on:

  • Transforming Economies
  • Growing Middle Income Populations
  • Deepening Comparative Advantages
  • Emerging Champions

Temasek’s portfolio covers a broad spectrum of industries: financial services; telecommunications, media & technology; transportation, logistics and industrials; life sciences, consumer & real estate; energy & resources.

Total shareholder return since inception in 1974 has been 16% compounded annually.

Temasek has a corporate credit rating of AAA/Aaa by rating agencies Standard & Poor's and Moody's respectively.

For more information on Temasek, please visit www.temasek.com.sg

To view or download the Temasek Review 2013, please visit www.temasekreview.com.sg

 

Temasek Review 2013 - Highlights (with US$ equivalents)
 

  • Net portfolio value

    • 31 March 2013 : S$215 billion  US$173 billion
    • 31 March 2012 : S$198 billion  US$157 billion
    • 31 March 2011 : S$193 billion  US$153 billion
    • 31 March 2010 : S$186 billion  US$133 billion 
    • 31 March 2009 : S$130 billion  US$86 billion
  • Total shareholder return as at 31 March 201

    •                     S$ Terms        US$ Terms
    • One-year          : 8.86%             10%
    • Three-year        : 4.94%             9%
    • 10-year             :   13%            17%
    • 20-year             :   14%            16%
    • Since inception :   16%            18%
  • Investments & divestments for the year ended 31 March 2013

  • New Investments : S$20 billion  US$16 billion
  • Divestments        : S$13 billion   US$10 billion
  • Cumulative investment & divestment for the decade ended  31 March 2012

  • Investments        : S$159 billion  US$113 billion
  • Divestments        : S$100 billion   US$71 billion
  • Group Shareholder Equity

  • 31 March 2013 : S$169 billion  US$136 billion
  • 31 March 2012 : S$158 billion  US$126 billion
  • 31 March 2011 : S$155 billion  US$123 billion
  • 31 March 2010 : S$150 billion  US$107 billion
  • 31 March 2009 : S$118 billion  US$78 billion
  • Group Net Profit

    • 31 March 2013 : S$11 billion  US$9 billion
    • 31 March 2012 : S$11 billion  US$9 billion
    • 31 March 2011 : S$13 billion   US$10 billion
    • 31 March 2010 : S$5 billion   US$3 billion
    • 31 March 2009 : S$6 billion  US$4 billion

 

For media queries, please contact:

Jeffrey FANG
Associate Director, Corporate Affairs, Temasek
Tel: +65 6828 6857
E-mail: 
jeffreyfang@temasek.com.sg 

Terence FOO
Managing Partner, Newgate Communications
Tel: +65 6532 0606
E-mail:
terence.foo@newgatecomms.com.sg

 

Additional Information

• Media Conference Presentation Slides

• Media Conference Selected Questions & Answers 

• Temasek Review 2013 website

• Photo of panellists (From L to R):

  • Rohit SIPAHIMALANI, Co-Head, Investment Group, Head, India and Co-Head, Middle East;
  • CHIA Song Hwee, Head, Investment Group and Co-Head, China; and
  • Boon SIM, President, Americas, Head, Markets Group and Co-Head, Credit Portfolio

• Photo of Rohit SIPAHIMALANI

Photo of CHIA Song Hwee

• Photo of Boon SIM

• Biography of Panellists

 

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Temasek Review 2013

Beyond Investing: 
Temasek delivered a record net portfolio value of
S$215 billion, with a net cash position.

Investment Themes

Guided broadly by our investment themes, we seek to build a portfolio that delivers sustainable long term returns.