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, 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.
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