Monday, 14 June 2021

Singtel to rethink strategy as it prepares to book almost $1bn loss

by Harry Baldock, Total Telecom
Friday 14 May 21

The Singaporean telecoms company said it had begun a strategic review of its digital marketing arm Amobee and cyber-security business Trustwave

Singtel has today announced that it expects to announce a net loss of $907 million in its upcoming full-year results. The losses come primarily due to the severe impairment of two of its US-based units, digital advertising platform Amobee and cyber-security firm Trustwave. As a result, Singtel has announced a major strategic review that could see significant restructuring of product or business segments…

Singtel has today announced that it expects to announce a net loss of $907 million in its upcoming full-year results.

The losses come primarily due to the severe impairment of two of its US-based units, digital advertising platform Amobee and cyber-security firm Trustwave. As a result, Singtel has announced a major strategic review that could see significant restructuring of product or business segments, or even divestment of these units altogether. 

"We are open to all types of strategic partnerships and deals including inviting investors who have complementary capabilities and can enhance the value of the businesses," said group chief executive Yuen Kuan Moon in a statement on Friday.

Both of these businesses have been hit hard by the pandemic, stifling their ability to scale up. For Amobee, the pandemic has resulted in an almost year-long contraction in advertising spend by some of its largest clients. This is particularly prevalent for clients related to industry sectors that are being slow to bounce back from the near global lockdowns of the previous year, such as the automotive sector. 

“While the economy is picking up... it is not the same across all sectors. Some of our business at Amobee is quite heavily weighted in sectors such as FMCG (fast-moving consumer goods), auto and travel which means that these sectors will take longer to pick up. So we are disproportionately impacted on our business at Amobee,” said Singtel Group digital life CEO Samba Natarajan.

Meanwhile, Trustwave has seen a delay or reduction in spending from the US government as a result of the change in administration at the start of this year.

Reviews of the businesses are expected to take up to a year, with Singtel expected to announce a new overall growth strategy alongside its annual results at the end of this month. The company’s annual net profit is down 65% to its lowest point in over 20 years. 

 

Want to keep up to date with the latest developments in the world of telecoms? Subscriber to receive Total Telecom's daily newsletter here

Also in the news: 
BT raises FTTP target to 25m, will create 7,000 jobs
How fibre networks will change London's fortunes
What’s the score? Total Telecom’s quarterly financial Score Board

Since you're here...

...the Telecoms industry is characterised by constant change and evolution. That's why it's crucial for telecoms professionals to keep up-to-date with what is happening. Join 35,000+ of your peers and sign up to our free newsletter service today, to be in the know about what is going on. PLUS, as a member you can submit your own press releases!

See all membership options

Please enable JavaScript to view the comments powered by Disqus.

Newsletter signup

Quickly get on board and up to date with the telecoms industry