Hello everyone. The COVID-19 public health crisis has morphed into a global economic crisis and has now become a social and humanitarian crisis in many parts of the world: probably the worst since World War II.

As this COVID environment continues, perhaps until a vaccine or a cocktail of therapies is found, the world will continue to be volatile and complex and perhaps even chaotic at times.

Preliminary Portfolio Performance

We were not spared the impact of COVID in the last quarter of our financial year ended 31^st March 2020.

However, it has been less than some commentators have predicted, as our portfolio has again proven its resilience.

Our preliminary Net Portfolio Value as at 31st March this year was S$306 billion. For context, while marginally lower than the previous year, that’s up threefold in the past 16 years.

Our one-year Total Shareholder Return was minus 2.3%. However, our long term performance measures remain relatively stable, with annualised returns of 14% since inception in 1974.

The end of our financial year coincided with the worst of the market dislocation during the onset of COVID. The markets bottomed on 23^rd March. Up until the end of January, our Portfolio Value had trended well.

However, the market value of our listed assets has risen since the end of March.

We ended the year in a net cash position with a strong balance sheet.

This positions us well to ride through the tough times, to position our companies for future growth, and in other opportunities that may present themselves.

We’ve been working hard over the years to build a portfolio that is more resilient to shocks, investing into good quality companies with strong fundamentals.

In particular, our unlisted investments, which are recorded at book value, adjusted for impairment, have provided good returns.

In addition, our more recent investments, guided by our themes and trends, have also performed well, given the wider economic conditions.

We don’t measure ourselves against public market indices, because our portfolio is made up differently. However, they provide some colour as to relative performance.

During past crises, such as the GFC and SARS, Temasek had outperformed the market indices. The performance of our portfolio this last financial year continues this trend.

At Temasek, we invest for the long term. We accept that being an investor in equities means higher year-to-year volatility and the risk of negative returns.

This is balanced by an expectation of higher returns over the long term.

We don’t manage our portfolio to short term changes in market value, because we’re not trading our assets over short horizons.

Instead, we focus on key structural trends like sustainable living and longer lifespans, and seek to deliver sustainable returns over the long term.

 At Temasek, we have roles that go beyond delivering sustainable returns.

We strive to be a forward looking, responsible investor, focused on doing right, and doing good for our communities, whether in good times or tough times; to deliver sustainable value over the long term.

Our world view, outlook, and position

Looking ahead, the new “COVID-normal” will be even more complex.

A lower returns environment, geopolitics and strategic rivalries, and the pandemic will create even more uncertainties for investors.

The market rebound we’ve seen in recent weeks should be viewed with caution. As the emergence of second waves of infection has forced a return to lockdowns in some places, markets may well resume their volatile behaviour.

We will look for investments that are aligned with the long term structural trends that we have identified.

We are working with our companies to transform, even during these times, so they build their resilience and emerge from the downturn in a strong position to grow.

And beyond investing, we are working across new and innovative fields that will seed new investment opportunities and platforms for growth.

For instance, we recently concluded a partnership with the Monetary Authority of Singapore to trial a blockchain-based multi-currency payments platform, involving more than 40 companies. This paves the way for new commercial applications of blockchain technology.

Fight against COVID-19

All the more at this time, we need to be doing right and doing good for our communities, as we weather a storm the likes of which hasn’t been seen in a century.

Back in 2003, the Temasek Board made a commitment to share part of the returns we make above our risk-adjusted cost of capital with the community.

And now, that discipline has given us the wherewithal to be able to step up and support our communities, here in Singapore and further afield, to tackle COVID.

We’ve been working in partnership with governments, our portfolio companies and many others to help tackle COVID. Our efforts have focused on five key areas: diagnostics, containment, treatment, protection & prevention, and donations.

For example, in Singapore, together with more than 20 partners, our staff courageously entered into the red zone to help test priority groups, both in the dormitories and at specially established testing centres at private hospitals.

We’ve been working with local industry and researchers to help develop production capabilities in essential supplies such as swabbing kits, masks and even ventilators.

On the local community front, we distributed millions of hand sanitisers, masks, face shields and oximeters to the community, and especially to the more vulnerable groups, such as the elderly, and frontline workers in healthcare, public transport, security and more.

Globally, we also contributed medical supplies such as test kits, masks and sanitisers, and supported additional donations, to more than 30 countries, from our near neighbours to those much further afield.

Our staff across China, India, Europe and the Americas have also helped to provide food and medical supplies to their local communities; especially to those whose lives have been badly disrupted by the outbreak.

 Many of our companies are leaning in to help in big ways as well.

For example, BenevolentAI, a UK based AI company is using its AI technology to better understand the virus and help develop new drugs against COVID.

Zipline, a drone delivery company based in the United States, is providing drone deliveries of essential medical supplies to rural communities in Ghana.

And at home, Tychan is pioneering work to develop antibody treatments for COVID.

And our very own SMRT and HOPE Technik have joined other transport companies to engineer isolated negative pressure transport vehicles, or what we call COMETs, to safely transport COVID patients.

To everyone involved; thank you. You have all gone beyond the call of duty to do what we can for others.

You know that we have had to delay our full Temasek Review till September, because the impact of global lockdowns has delayed many companies’ financial reporting. Only when our portfolio companies have reported, can we consolidate and prepare our own Group financials, followed by the usual audit process.

However, we wanted to share some preliminary portfolio information as soon as we were able to.

We must all stay committed and resilient. Together, we can all work hard to get through this challenging period.

Our focus at Temasek is on Doing Right and Doing Good for our community, while we continue our quest to Do Well. For only when our communities thrive, can we do well as an investor.

Please stay safe and continue to be well.

May you and your loved ones be blessed during these challenging times.

Thank you.