The sharp decline in oil prices is perhaps the single most important economic factor in 2015. The reduction in capital and operating expenditures by Oil & Gas player s will have significant bearing on the prospects of heavy engineering as well as Oil & Gas service providers.We expect challenging times for our Offshore and Heavy Engineering segments as growth opportunities will be scarce and competition can only intensify. The outlook for LNG shipping is expected to be equally challenging as the industry grapples with oversupply of vessels. Heavy delivery of new vessels in 2015 will exacerbate the situation. While this will depress freight rates, there remain opportunities to develop new LNG time charters on the back of new LNG projects that are in progress. The Group will have to position itself to pursue and expand its third party businesses as we continue to support PETRONAS’ requirements. On a brighter note, the Group does expect freight rates in the petroleum shipping sector to remain buoyant. Ironically, as producers continue to maintain their outputs which had put pressure on oil prices, it will be a boon for the shipping sector as demand for the movement of oil will remain very robust. 2015 will be another year of relatively modest delivery of new vessels, keeping the threat of excess supply at bay. I look forward to 2015 with new eagerness and optimism, knowing full well that MISC’s revitalised balance sheet will serve us well in our renewed pursuit of growth, an agenda that the Group was not able to focus on as we channelled our resources towards battling and resisting the down-cycle that had plagued the shipping sector since 2009. Despite uncertainty in world economic conditions and the risks from a low oil price environment, I believe MISC will be able to seize any opportunities that may appear in this period of adversity. APPRECIATION I would like to take this opportunity to thank YBhg. Datuk George Ratilal, as the previous Chairman of the Board of Directors and YBhg. Datuk Nasarudin Md Idris, who retired as the President/ Chief Executive Officer of MISC Berhad at the end of the financial year, for their stewardship and wisdom in steering the Group the past few challenging years. I am very pleased that they will continue to serve as Board Members and we can continue to benefit from their valuable knowledge and experience. My gratitude goes out to all the other Board Members for their guidance and counsel the past year. In addition, I would like to record my appreciation to the management and employees of the company for their commi tmen t and ded i ca t i on i n delivering the outstanding performance for the year. I look forward to MISC’s next phase of growth together with all of you. To all our customer s, supplier s, business partners and financiers, my sincere thank you to you for your continued support and cooperation in all our endeavours. A special note of thank you as well to the Royal Malaysian Navy for their support and assistance to us over the years which has enabled us to ply our trade safely and securely from possible piracy threats. Last but not least, my heartfelt appreciation to all our shareholders for your belief and faith in us throughout the years. The last few years had been filled with challenges but we had been resilient and committed to our mission and objectives. I hope we have repaid your confidence in us with the restoration of the financial strength of the Group as well as the delivery of an outstanding financial performance in the past financial year 2014. We look forward to MISC growing from strength to strength. DATO’ AB. HALIM BIN MOHYIDDIN Chairman 3 April 2015 p 51 MISC BERHAD - Annual Report 2014
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