Temasek profit tumbles

       The Singapore state investment firm Temasek Holdings said yesterday that its net profit plunged 67%to S$6 billion (US$4.25 billion) in the year to March.
       Net profit fell from the record $18 billion achieved in the financial year ending March 2008 as a result of the global financial crisis.
       The value of its worldwide investment portfolio also fell 30% to $130 billion as of end-March from $185 billion the previous financial year.
       Temasek chief executive Ho Ching said at a news conference the firm was building up liquidity to prepare for a possible downturn.
       "However, we did not anticipate the speed and ferocity of the worst financial crisis since the Great Depression," said Ho, wife of Singapore Prime Minister Lee Hsien Loong.
       "Looking ahead, we believe the worst of the global meltdown risks are behind us. While there are some 'green shoots'of growth, some structural risks still remain for the medium term."
       Chairman S. Dhanabalan said in the company's annual report that the profit drop "reflected the generally weaker operating performances of our portfolio companies as well as realised gains and losses from our divestments during the year."
       Temasek's investments were hammered by the financial and economic crisis that led global markets to plummet in the second half of last year.
       Some of its losses came from investments in Western financial companies that were in need of a capital injection as the economic crisis unfolded following the collapse of US investment bank Lehman Brothers.
       It took a stake in the Wall Street icon Merrill Lynch but when the US firm was bought by Bank of America, Temasek divested its interest. It also bought into British lender Barclays but later also offloaded that stake.
       It is estimated Temasek lost more than US$5.4 billion from the sale of its holdings in the two lenders, according to sources quoted by Dow Jones Newswires.
       Temasek made its divestments just as markets began to recover earlier this year.
       In July, the company rescinded the appointment of US businessman Charles Goodyear as its new chief executive due to differences over strategy.
       Goodyear would have been the first foreigner to run the once-secretive sovereign wealth fund and his appointment just a few months ago was hailed as part of an effort to transform Temasek into a truly global enterprise.
       Ho, a former civil servant who ran state-linked firms, will stay on as CEO and executive director of the firm, which manages a global portfolio invested in a range of sectors including airlines, resources and consumer products.