Net profit in the year to March 31 was S$9.1 billion (US$6 billion), down from $12.8 billion a year ago.

Revenues declined to $74.6 billion from $79.8 billion the previous year, Temasek said.

"This drop is partly due to lower realised gains at the Temasek level from a much reduced level of divestments of five billion dollars ... and partly due to the impairment of our investment in Shin Corp," said company chairman Suppiah Dhanabalan.

He said divestments fell nearly two-thirds from the $13 billion a year earlier.

Temasek did not reveal the size of the Shin Corp impairment.

Temasek bought 49 percent of Shin in January last year for nearly US$1.9 billion tax-free from the family of then Thai Prime Minister Thaksin Shinawatra.

The purchase sparked a scandal which triggered mass protests against Thaksin, and culminated in his overthrow in a bloodless military coup last September.

Temasek said the group remains optimistic about the Thai company's prospects.

"We are confident of the underlying business of Shin Corp," said Ng Yat Chung, Temasek managing director for portfolio management.

Despite the profit decline, Temasek's net portfolio value grew 27 percent to $164 billion, exceeding $100 billion for the first time, it said.

Ng said Temasek has achieved a compounded annual total shareholder return of more than 18 percent by market value since its inception in 1974, and maintaining this figure "will continue to be a challenging and tough long-term goal for us."

"Looking ahead, we remain cautious in the light of medium term economic risks and signs of bubbly market conditions," he said.

After the 49-percent buyout of Shin Corp, a Temasek-led group of investors increased its total stake to 96 percent through a mandatory offer.

The Shin deal became the subject of a slate of criminal probes in Thailand and led to tensions in relations between the two countries.

Temasek has said it complied with all laws and regulations in Thailand when it took over Shin.

Coup leader General Sonthi Boonyaratglin caused a diplomatic stir in February when he said he would reclaim Thai satellites that came under control of Temasek, and accused Singapore of spying on Thailand via the satellites.

He later backed off to defuse a row with Singapore.

Temasek controls some of Asia's best-known companies including Singapore Airlines, Chartered Semiconductor, Neptune Orient Lines, port operator PSA International and Singapore Telecommunications.

It is one of two vehicles used by Singapore to invest its massive savings globally, and has stakes in Indonesia's PT Indosat, DBS Group Holdings, PT Bank Danamon Indonesia, as well as other firms.

The company said it continued to reshape its portfolio with an increase in exposure to Asia -- outside of Singapore and Japan -- to 40 percent from 34 percent previously.

It said total shareholder return by market value for the year was a healthy 27 percent

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