MEDIA RELEASE

15 Sep 2005

12 October 2005 (Singapore) –Temasek Holdings (“Temasek”) revealed in its Temasek Review 2005 today that the value of its total portfolio has grown 15% to S$103 billion over the last financial year ending 31 March 2005 (FY2004), up from S$90 billion the year before. It made S$13 billion of new investments and monetised S$5 billion of its portfolio during the year.

Mr S. Dhanabalan, Chairman of Temasek, said in the Chairman’s Message: “We remained focused on delivering value through active portfolio transformation during FY2004 ending 31 March 2005.”

“The reshaping of our overall portfolio will be a deliberate and cautious process. It requires patience and perseverance, and a keen eye on achieving value and returns based on market conditions and opportunities,” he added.

Temasek’s asset exposure to Singapore continued to grow, but constituted a smaller 49% of an enlarged portfolio at the end of March 2005, compared to 52% a year earlier. Exposure to the rest of Asia, outside Japan and Singapore, grew from 16% to 19%, largely driven by its portfolio shift into Asia.

Total Shareholder’s Return (TSR) by market value remained good at 16% over the last financial year ending 31 March 2005. Two-year TSR was a strong 30%, supported by the strong market rebound a year earlier. TSR since inception held steady at a robust 18% per annum compounded over 31 years.

The healthy underlying performance of its portfolio companies and the sturdy returns from other direct investment activities underpinned Temasek’s creditable one-year TSR by shareholder’s funds of 12%.


Financial Highlights:

Temasek’s Performance

• Temasek’s portfolio value grew 15% to S$103 billion as at 31 March 2005, up from S$90 billion as at 31 March 2004.
• Temasek’s 31-year Total Shareholder's Return (TSR) by market value held steady at 18% compounded annually.
• The corresponding 31-year TSR by shareholder's funds remained a healthy 16%. This measures the changes in shareholder’s funds, and reflects the underlying profitability of the portfolio companies.
• One-year TSR by market value remained good at 16%, with a two-year TSR of 30%. TSR by market value is affected by the market value at the starting point relative to the ending point of the period, and is thus subject to market volatility over the specific period being considered (please see Annex).
• The one- and two-year TSR based on shareholder’s funds were a creditable 12% and 14% respectively.
• Wealth added was S$8.1 billion for financial year ending 31 March 2005, including S$2.5 billion from direct investment activities. The latter has been driven by the portfolio shift into Asia. Wealth added measures the shareholder returns net of risk adjusted cost of equity.
• Temasek made new investments of almost S$13 billion, mostly in Asia including Singapore.
• It monetised about S$5 billion of its portfolio, with a net gain of S$1.6 billion.
• Over the last three years, Temasek’s cash dividends to its shareholder averaged S$1.3 billion a year.

Consolidated Group Performance

• On a consolidated basis, the Temasek group revenue increased 22% from S$56.5 billion in FY 2003 to S$68.7 billion in FY2004. This reflects the consolidated group revenue of Temasek and its subsidiaries.
• Group operating profit increased 37% from S$7.4 billion in FY 2003 to S$10.1 billion in FY 2004.
• Net profit for the Temasek Group remained robust at S$7.6 billion in FY 2004.
• Group EVA was a positive S$1.7 billion, up from negative S$0.4 billion in FY2003.

Mr Dhanabalan said in his message: “We will continue to seek new investments that will maximise value within our risk return framework. We have the flexibility to take a long view of our investments. We also have the option of taking concentrated positions. We remain open at all times to increasing, holding or reducing our stakes in our entire portfolio, including our stakes in TLCs, through buying, selling, swapping, restructuring or rationalisation. We also keep our options open for more efficient utilisation of capital.”

During FY2004, Temasek invested over S$10 billion in Asia. New portfolio companies include China’s Minsheng Banking Corp, Pakistan’s NIB Bank, India’s Mahindra & Mahindra, as well as Malaysian Plantations (which wholly owns Alliance Bank). It also took minority stakes in the emerging budget travel industry by taking minority stakes in Tiger Airways and JetStar Asia.

Added Mr Dhanabalan in the Temasek Review: “We remain optimistic on the long-term prospects of Asia. However, we are cautious in the short to medium term, amidst a relatively uncertain global outlook.”

“Looking ahead, we remain committed to taking on new challenges to shape and reshape our future, and creating and maximising sustainable shareholder returns,” he said.

*******Ends********

Annex

TOTAL SHAREHOLDERS’ RETURNS (TSR)

Note:
a) TSR for MSCI Singapore Index assumes dividends are re-invested.
b) Temasek TSR assumes dividends not re-invested by shareholder.
c) TSR for STI assumes no re-investment of dividends.

About Temasek Holdings

Established in 1974, Temasek Holdings is an Asia investment company headquartered in Singapore. It is an active shareholder and investor. It aims to create and maximise sustainable shareholder value. It manages a diversified global portfolio of S$103 billion, principally in Singapore, Asia and the OECD economies. It has a corporate credit rating of AAA/Aaa by Standard & Poor's and Moody's respectively.

Its investments cover various industries: telecommunications and media, financial services, property, transportation and logistics, energy and resources, infrastructure, engineering and technology, as well as pharmaceuticals and biosciences.

Examples of Singapore-based companies in its portfolio are Singapore Airlines, Singapore Telecommunications, DBS Bank and Neptune Orient Lines. Industrial stalwarts include Singapore Technologies Engineering, PSA International, Singapore Power, Keppel Corporation and SembCorp Industries. Its overseas investments include blue chips in India such as ICICI Bank, Mahindra & Mahindra and the Apollo Hospital group; China Construction Bank and China COSCO Holdings in China; Bank Danamon and Bank Internasional Indonesia in Indonesia; Quintiles Transnational Corp in the USA; as well as Hana Bank in South Korea.

For media queries, please contact:

Eva Ho
Director, Corporate Communications
Tel: 65 6828 6763
Mobile: 65 9617 6234
Email: evaho@temasek.com.sg

Rachel Lin
Associate Director, Corporate Communications
Tel: 65 6828 6766
Mobile: 65 9666 1855
Email: rachellin@temasek.com.sg

Serene Lee
Associate Director, Corporate Communications
Tel: 65 6828 6765
Mobile: 65 96920918
Email: serenelee@temasek.com.sg