Communication and Media issuer up for Consideration?

Shawn Sng  |   30 Jun 2023  |    265 views

Company Overview

ST Telemedia is a Singapore-headquartered strategic investor focused on investing in, operating and managing a portfolio of companies and investments in the Communications, Media and Technology (CMT) space globally. Its key business segments comprise Communications and Media Services, Data Centres and Infrastructure Technologies. With its portfolio of companies and STT Communication Ltd (STTC) being its wholly-owned subsidiary, ST Telemedia has established a global footprint across Asia Pacific, the UK and the United States, and has extensive experience investing and operating in both emerging and mature markets. The Group’s portfolio consists of mature companies (such as StarHub) and growth companies (such as STT GDC).

 

Some companies within ST Telemedia’s portfolio

StarHub (41.9% stake)

It is one of Singapore’s integrated information and communications companies, offering a wide range of services to both consumers and businesses. These include mobile, digital cable TV, broadband, and fixed network. StarHub is listed on the Main Board of the SGX-ST and had a market capitalization of approximately S$1.779 billion as of 30th June 2023.

 

STT GDC (100% stake)

A wholly-owned subsidiary of the Issuer that is developing an integrated global data center platform to deliver a suite of products, services, and solutions for customers. It will do this by acquiring, developing, and integrating data center assets in key markets across Europe, Asia Pacific, and other growth markets.

 

Corporate Structure

 

ST Telemedia is a wholly-owned subsidiary of Temasek, which is in turn wholly-owned by the Government of Singapore through the Ministry of Finance. Temasek is an investment company headquartered in Singapore with a diversified investment portfolio. ST Telemedia is guided and managed by its Board and management. Temasek does not direct the commercial or operational decisions of the company.

 

Financials for FY2022

In FY2022, the group’s revenue rose by 12.4% YoY (from $4.2bn in FY2021 to $4.72bn in FY2022). The increase in revenue was mainly contributed by StarHub’s revenue increase across all segments, with broadband and business enterprise revenues seeing the biggest gains and STT GDC’s revenue increasing due to an increase in billable capacity driven by hyper scale cloud service providers. However, profit from operations decreased by 28.7% YoY (from S$338 million in FY2021 to $241 million in FY2022). The decrease in net profit was mainly due to higher operating expenses at StarHub. These expenses included non-recurring provisions related to StarHub’s DARE+ initiatives, as well as impairment losses from the shutdown of legacy infrastructure and the discontinuation of a business line.

 

In terms of the group’s liquidity position, cash and cash equivalents amounted to $2.94bn which exceeds its short-term borrowing of $704 million in FY2022. Hence, ST Telemedia should not face any difficulty in repaying any of its short-term obligations. The group also has a gearing ratio that stood at 60.7%.

 

Overall, investors who are interested in names that have a strong parentage and also wish to dabble in the Communications, Media and Technology space may take a look at ST Telemedia. Additionally, considering the current high-interest rate environment, if ST Telemedia plans any new issuances, they would have to be priced accordingly to match with the current environment.

 

ST Telemedia Outstanding bonds

  • Singapore Tech Telemedia 4.05% 12Feb2025 (SGD)
  • Singapore Tech Telemedia 5.00% Perpetual (SGD) – Next call date 17Jan2024
  • Singapore Tech Telemedia 4.10% Perpetual (SGD) – Next call date 2Jul2027
  • Singapore Tech Telemedia 4.20% Perpetual (SGD) – Next call date 3May2029

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