ST Engineering Announces \$667 Million Impairment for iDirect Group Amidst Satellite Industry Shifts

Singapore, 12 November 2025 – ST Engineering (Singapore Technologies Engineering Ltd) has announced a significant non-cash impairment of \$667 million for its iDirect group subsidiary, following a comprehensive assessment of the business’s Value in Use (VIU), now determined to be just \$170 million as of 30 September 2025. This marks a dramatic reduction from its previous carrying amount of \$837 million.

Key Highlights from the Announcement

• Large Non-Cash Impairment: ST Engineering will recognize a non-cash impairment charge of \$667 million related to its iDirect group.
• Impairment Drivers: The impairment stems from a rapidly evolving satellite communications (satcom) industry, where Non-geostationary Satellite Orbit (NGSO) operators like Starlink and Kuiper are aggressively expanding their satellite constellations, eroding the market share of traditional Geostationary Earth Orbit (GEO) operators.
• Financial Underperformance: iDirect group has reported a 9% year-on-year revenue decline and a 22% EBITDA decline for the first nine months of 2025, with an EBIT loss of \$89 million for FY2024, falling short of group expectations.
• Offset by Divestment Gains: The impairment will be partially offset by recent divestment gains totaling \$258 million, with total cash proceeds from these divestments amounting to approximately \$594 million.
• Strategic Review Underway: ST Engineering is actively exploring strategic options for the iDirect group to mitigate risk and financial exposure, including potential business restructuring or divestment, although no definitive agreements have been reached.
• Outlook for 2025: Despite the impairment, ST Engineering expects to report a positive net profit for FY2025, while the full impact on second-half results is still being assessed.

Details Investors Need to Know

Industry Headwinds and Business Environment

The satcom sector is experiencing disruptive changes, with NGSO operators such as Starlink and Kuiper rapidly increasing their satellite deployments (over 2,600 and 150 satellites, respectively). These operators are introducing proprietary, vertically integrated ground systems, reducing their reliance on third-party equipment providers such as iDirect group. Furthermore, NGSO players are gaining traction with traditional GEO customers, especially in sectors like aviation, by offering lower latency, higher bandwidth, and better service flexibility. This has led to consolidation among GEO operators, exemplified by the SES-Intelsat merger.

Industry projections indicate NGSO revenue market share will surge from around 24% in 2024 to approximately 75% by 2032, underscoring the magnitude of the structural shift facing iDirect group.

Product Adoption and Performance Issues

iDirect group has invested in its next-generation platform, Intuition, designed for multi-orbit satellite networks. However, customer adoption has lagged due to delayed launches by GEO operators, compounding the group’s challenges.

Financially, iDirect group has underperformed, with year-to-date revenue and EBITDA falling 9% and 22%, respectively, and a full-year EBIT loss of \$89 million for FY2024. Management initiatives to rightsize operations and strengthen leadership have not yielded a turnaround in performance.

Strategic Options and Risk Mitigation

Given the continued losses and deteriorating short-term outlook, ST Engineering is evaluating strategic alternatives for iDirect group to reduce risk and financial exposure. These could include restructuring, partnership, or divestment, but no deals have been finalized.

The company remains optimistic about the satcom industry’s long-term prospects but acknowledges that a turnaround for iDirect group will take longer than originally anticipated.

Shareholder-Relevant and Price-Sensitive Information

• The \$667 million impairment is a material, price-sensitive event that will impact ST Engineering’s reported results for 2025.
• Offset from Divestments: Recent divestments (CityCab, LeeBoy, and SPTel) have generated \$258 million in gains, partially cushioning the impairment’s impact.
• Strategic Actions Under Consideration: Ongoing discussions regarding the future of iDirect group may lead to significant structural changes or divestitures, which could have further implications for shareholders.
• Profit Guidance: The group expects to remain profitable for 2025, but the full impact on second-half results is still being assessed and will be updated in due course.

Conclusion

The announcement of a \$667 million impairment for iDirect group marks a pivotal moment for ST Engineering, reflecting both the rapid transformation of the satellite communications industry and the company’s proactive approach to risk management. Investors should closely monitor further updates on the strategic review of iDirect group, as well as the company’s ability to sustain profitability in light of these challenges. Any developments in the ongoing strategic discussions could be highly price-sensitive and have material implications for ST Engineering’s share value.

Disclaimer: This article is intended for informational purposes only and does not constitute financial advice or a recommendation to buy or sell any securities. Investors are advised to conduct their own due diligence and consult their financial advisors before making investment decisions.

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