FINANCIAL REVIEW TREASURY MANAGEMENT Given its international operations, the Group is exposed to various financial risks, including foreign exchange, liquidity, interest rate and credit risks. The Group has established treasury policies and guidelines to mitigate these risks. Treasury activities are handled by the Group’s wholly owned entity, ST Engineering Treasury Pte. Ltd. (STET), to ensure effective management of the Group’s liquidity and financial risk exposures. During the year, the Group updated the $5b Multicurrency Medium Term Note Programme (MTN Programme) and the U.S. Commercial Paper Programme (USCP Programme) established on 18 March 2020 and 26 August 2019 respectively. The MTN Programme was amended and updated to the $5b Global Medium Term Note Programme (GMTN Programme) on 18 April 2022. Under the GMTN Programme, its wholly-owned subsidiaries, ST Engineering RHQ Ltd., STET and STE TransCore Holdings, Inc. (STE TCH) can issue notes (Notes) from time to time, in various amounts and tenors and may be fixed rate notes, floating rate notes, zero coupon notes, index linked notes, dual currency notes or a combination of any of the foregoing. On 5 May 2022, STE TCH issued a US$700m 3.375% Notes due 2027 and a US$300m 3.75% Notes due 2032. The net proceeds of these issues were used by STE TCH to refinance part of the short-term USCP issued for the acquisition of TransCore. STET had entered into Treasury Locks (T-Locks) in anticipation of the issuance of the Notes and settled the T-Locks in its favour. The interest expenses incurred on the Notes were reduced through the amortisation of the T-Locks settlement gains. On 29 August 2022, the Group completed the update of the USCP Programme to include STE TCH as an issuer, in addition to ST Engineering North America, Inc., with the total limit remaining the same at US$3.0b. The committed revolving credit facility to backstop the USCP Programme was concurrently revised to US$2.2b. Banking Facilities The Group has banking facilities of approximately $21.2b (2021: $16.8b) as at 31 December 2022 to support business operations in the areas of trade finance, hedging and credit. As at 31 December 2022, the Group has utilised $7.2b or 34% of its total available facilities (2021: $4.4b or 26%) with $14.0b or 66% (2021: $12.4b or 74%) remaining available. * excludes US$2.2b committed revolving credit facility to backstop USCP. 16.8 0 5.0 10.0 15.0 20.0 25.0 Trade Finance Foreign Exchange Interest Rates Swaps & Cross Currency Swaps Loans 4.4 21.2 7.2 BANKING FACILITIES* ($b) Available 2021 Utilised 2021 Available 2022 Utilised 2022 54 ST ENGINEERING ANNUAL REPORT 2022
RkJQdWJsaXNoZXIy NjMyNDM=