MISC Annual Report 2017

107 Strategy & Performance MOVING FORWARD While there appear to be some signs pointing towards a recovery, the ongoing depression in shipping charter rates is expected to continue in 2018, exerting pressure on vessel operating costs. Come 2019 and 2020 respectively, upcoming regulatory requirements like the Ballast Water Management System (BWMS) as well as IMO’s Global Sulphur Cap regulations 2020, take effect. Involving the installation of BWMS and Sulphur Oxide (SOx) scrubbers on board vessels, these new requirements will impact shipowners financially and affect the way the vessels are managed operationally. Against this challenging backdrop, Eaglestar will set its sights on ensuring further cost optimisation whilst simultaneously maintaining the highest operating standards to ensure the Group’s businesses remain competitive and comply with all existing regulations. As part of its energy efficiency optimisation mandate, Eaglestar continues to focus its efforts on enhancing fuel savings derived from vessel operations. Eaglestar’s fuel saving activities to date are expected to hold it in good stead even as the Group prepares to comply with the International Convention for the Prevention of Pollution from Ships (MARPOL) Annex VI reporting requirements relating to fuel consumption (effective 1 January 2019). The segment also continues to undertake research on SOx scrubbers and explore the viability of tapping hybrid fuels for positive long-term environmental impact. Wh i le t here appear to be some s i gns po i nt i ng towards a recovery , t he ongo i ng depress i on i n sh i pp i ng charter rates i s e xpected to cont i nue i n 2018, e xert i ng pressure on vessel operat i ng costs. MANAGEMENT DISCUSSION & ANALYSIS INTEGRATED MARINE SERVICES