Singapore’s state-owned investment firm Temasek Holdings Pte. Ltd. said Thursday it posted a 26% drop in net profit for the year ended March 31 on the back of weaker contributions from its portfolio companies, even as its portfolio rose 43% in value.

The divergence between profit and portfolio performance shows that the share price of many companies owned by Temasek did well as global capital chased returns in emerging markets, yet many had trouble making money in a tougher business environment that included higher fuel costs and weaker international trade.

Temasek owns controlling stakes in some of Singapore’s biggest corporations, including Singapore Airlines Ltd., shipping company Neptune Orient Lines Ltd. and PSA International Pte. Ltd., the world’s biggest operator of port facilities. It also owns significant chunks of other Asian companies that include two of China’s biggest banks, a Thai satellite broadcaster and an Indian telecom operator. And it is the biggest shareholder in U.K.-based Standard Chartered PLC, with an 18% stake.

Temasek said its portfolio stood at S$186 billion as of March 31, nudging just above the S$185 billion it was valued at two years earlier after rebounding from huge losses in 2008 and early 2009. A sharp rise in global markets during the second quarter last year accounted for most of the recovery. Of the S$56 billion growth in the portfolio’s value last year, S$42 billion occurred in the four months to July 31, 2009.

Over the year to March 31, Temasek made a net S$4 billion of new investments, much of it in energy and resources, where it continues to direct money. In May and June, it invested over US$600 million in U.S. natural gas company Chesapeake Energy Corp. Energy and resources now account for about 7% of the companies investments, up from 5% a year earlier.

Other recent investments include US$200 million Temasek has invested in the initial public offering of Agricultural Bank of China. In May, Temasek also acquired a 5% stake in India’s National Stock Exchange for S$241 million.

Peter Stein / Costas Paris / P.R. Venkat

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