SINGAPORE – Singapore Telecommunications said on Friday (May 14) it expects to book net exceptional losses of $1.21 billion in its full-year results, mostly due to impairment of assets at two US-based units, digital advertising platform Amobee and cyber security firm Trustwave Holdings.

Singtel said it has started a strategic review to consider options for the two businesses, which may include restructuring of product or business segments, a full or partial divestment, or business combinations with other industry players.

“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 CEO Yuen Kuan Moon in a statement on Friday.

“Cyber security remains core to our group strategy and ICT (information and communications technology) offerings, and the review will be geared to ensure we capture the growth in Asia Pacific,” he added.

For the second half year, Singtel’s net exceptional losses will be $839 million. The figures are subject to finalisation as the statutory audits of Singtel and its subsidiaries are ongoing, the company said.

The telco will be announcing its second half and full-year results on May 27 when Mr Yuen, who took over the reins in January, will provide further details on strategic direction and priorities.

Singtel acquired Amobee for US$321 million (S$428 million) in 2012 and completed the acquisition of Trustwave at a reduced price of US$770 million in 2016.

Singtel said on Friday that the recoverable values of Amobee and its global cyber security business, which includes Trustwave, have been assessed to be below their carrying values as at March 31.

Consequently, the group is expected to record non-cash impairment charges of US$438 million (S$589 million) and US$250 million (S$336 million) to the intangible assets and goodwill of Amobee and global cyber security business respectively in the second half year. The impairment charges are based on Singtel’s best estimates.

The remaining carrying values of Amobee and its global cyber security business will be US$380 million (S$511 million) and US$517 million (S$695 million) respectively.

Singtel also said its Australian unit Optus expects to record non-cash impairment charges of A$197 million (S$204 million) due mainly to its legacy fixed access networks that will no longer be used.

Singtel’s exceptional losses are expected to be offset in part by an estimated $98 million gain from a dilution in its effective shareholding in Indian associate Bharti Airtel, after shares were issued by the latter as partial consideration for acquiring equity interest in Bharti Telemedia in March this year.

Singtel shares were trading at $2.38, down 1.25 per cent or three cents, at 9.06am on Friday, after the announcement.