MISC BERHAD • Annual Report 2016 92 President/Group CEO’s Review and MD&A THE WAY FORWARD Going forward, we anticipate that 2017’s operating environment will be equally, if not more challenging for industry players. Market conditions across all shipping segments are expected to remain restrained in view of the prevalent tonnage oversupply and downward pressure on margins. Declining charter rates for vessels too are putting increasing pressure on ship managers to maintain or optimise operating costs so that owners can remain competitive. The industry outlook remains uncertain. The issue of survival will remain top-ofmind and we are likely to see more compan i es go i ng i n t o d i s t ress . Notwithstanding the already taxing business environment, the shipping markets are not expected to get a reprieve as the cost of complying with new regulations such as ballast water management and emissions control standards will place a bigger burden on ship owners and operators. The topic of LNG as a marine fuel too will gather even more momentum as gas producers and the marine industry debate the pros and cons of this development. Amidst the expected low-key environment, MISC will focus its efforts on leveraging its resources and financial strength to create opportunities for growth in the coming future. Our businesses will look to our MISC2020 corporate strategy to guide us. Back in 2015, MISC was a USD10 billion asset company with no debt. In 2016, we touched the USD12 billion asset mark with only net debt of about USD1 billion. Our financial capacity to grow remains tremendous and is our greatest strength. The fact that we continue to demonstrate to the market that we are able to find new ways to grow despite tough market conditions, continues to stand us in good stead. On top of this, we have our highly competent and unified workforce, our strategic assets plus robust business strategies to leverage on to maintain our forward momentum. While growth opportunities are scarce given that most Oil & Gas customers are recalibrating their operations and aggressively trimming both operating and investment budgets to meet the challenges, I believe that if we are prepared to look hard and think out of the box, there will be ample opportunities for us to capitalise on. The strategic decisions we have undertaken these past few years and the positive results that have ensued, place MISC in a strong position to tap inorganic growth opportunities and deliver sustained growth. Be it the acquisition of distressed companies or assets or the strategic partnerships that we form with allies with common objectives, the only thing that can stop us is our own ambition and creativity. The people of MISC will continue to be fuelled by an unwavering belief, pride and passion as we work hard to build a global business and brand. We will also endeavour to conduct our business operations in a responsible and sustainable manner, define and enhance relationships with our key stakeholders as well as ensure holistic value creation over time. As the MISC Family rises to the task, I believe this is when we as a group will show our true capability and prowess.
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