ST Engineering Announces Major Impairment of iDirect Group and Strategic Review

Singapore, 12 November 2025 — Singapore Technologies Engineering Ltd (ST Engineering), one of Asia’s largest engineering groups, has announced a significant non-cash impairment of its satellite communications subsidiary, the iDirect group, and is actively considering strategic options for the business amidst a rapidly evolving industry landscape.

Key Points from the Report

• Impairment Announcement: ST Engineering has impaired the carrying value of the iDirect group by \$667 million, reducing its book value from \$837 million to \$170 million as of 30 September 2025.
• Reasons for Impairment: The main factors driving the impairment include:
  • Industry Disruption: The satellite communications sector is experiencing rapid disruption, particularly from Non-Geostationary Satellite Orbit (NGSO) operators like Starlink and Kuiper. These companies have rapidly expanded their satellite constellations and are deploying vertically integrated ground systems, reducing demand for external ground segment equipment traditionally provided by companies like iDirect.
  • Market Shift: NGSO operators are winning contracts from traditional customers of Geostationary Earth Orbit (GEO) operators, especially in aviation, offering lower latency, higher bandwidth, and more flexible services. Consequently, GEO operators are consolidating, as seen in the SES-Intelsat merger. Industry reports project NGSO’s revenue market share to surge from approximately 24% in 2024 to 75% by 2032.
  • Slow Customer Uptake: Adoption of iDirect’s next-generation Intuition platform has been slower than expected, largely due to delays in GEO satellite launches.
  • Financial Underperformance: In the first nine months of 2025, iDirect’s revenue and EBITDA declined by 9% and 22% respectively, following an EBIT loss of \$89 million in FY2024, which fell short of the Group’s expectations.
  • Ongoing Deterioration: Despite management changes, organizational right-sizing, and investment in new platforms, iDirect’s financial performance and near-term outlook continue to deteriorate.
• Impairment Offset: The impairment will be partially offset by recent divestment gains amounting to \$258 million from the sales of CityCab, LeeBoy, and SPTel, which collectively generated \$594 million in cash proceeds.
• Strategic Review Underway: ST Engineering is actively exploring strategic options for iDirect, including potential divestment or restructuring, to mitigate risks and financial exposure while strengthening iDirect’s ability to serve its customers. No definitive agreement has been reached, and there is no certainty a transaction will occur.
• Group Outlook: Despite the impairment, ST Engineering expects to report a positive net profit for FY2025. The impact on the second half results is still being assessed and will be updated in due course.

Implications for Shareholders and Market Impact

• Potential Share Price Sensitivity: The \$667 million impairment is a significant write-down that could impact investor sentiment and share valuations, especially as it follows continued losses in the iDirect group.
• Strategic Uncertainty: Ongoing discussions regarding the future of iDirect, with no definitive outcome yet, introduce a level of uncertainty that could affect the company’s risk profile.
• Offsetting Factors: The impairment is partially cushioned by recent divestments, which have bolstered the Group’s cash reserves and may provide some financial stability in the near term.
• Long-Term Industry Prospects: The company remains positive on the long-term prospects of the satellite communications industry, although the near-term headwinds and business challenges at iDirect are expected to persist.
• Future Updates: The company has indicated it will provide further updates regarding the impact on its second-half results and any material developments in the strategic review process.

Company Background

ST Engineering is a global technology, defence, and engineering conglomerate with a presence in over 100 countries and FY2024 revenues exceeding \$11 billion. It is a component of major indices such as MSCI Singapore, FTSE Straits Times Index, and Dow Jones Best-in-Class Asia Pacific Index.

Investor Relations Contact

Lina Poa
ST Engineering
Email: [email protected]

Disclaimer: This article is for informational purposes only and is not intended as investment advice. Investors should seek professional advice and refer to official company announcements before making any investment decisions. The information provided is based on publicly available company disclosures as of the date of publication and may be subject to change.

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