MISC Annual Report 2018

HOW WE CREATE VALUE OUTCOMES INPUTS VALUE CREATION ACTIVITIES K E Y E N A B L E R S C O R E I B U S I N E S S E S Trains and produces qualified and competent professionals with in-depth knowledge in the maritime field through balanced and integrated curriculums Owns and operates 15 floating solutions and provides one-stop Engineering, Procurement, Construction, Installation, Commissioning, Operations and Decommissioning (EPCICOD) solutions that cater for marginal, conventional and deepwater field production Provides marine assurance and compliance, port and terminal operations, management and consultancy services LNG ASSET SOLUTIONS INTEGRATED MARINE SERVICES PORT & TERMINAL SERVICES MARITIME EDUCATION & TRAINING MARINE & HEAVY ENGINEERING We create value for our various stakeholders by providing a comprehensive array of energy-related maritime solutions and services to our customers globally. Safety, reliability and operational excellence are embedded in every aspect of our value creation activities. We care for our people, the environment, our assets and the cargoes they carry. We do so by having a strong focus on maintaining our Health, Safety, Security and Environment (HSSE) performance, continuously developing our people, and investing in innovative technology to improve efficiency and reduce our environmental impact. Provides integrated and complex heavy engineering and marine repair solutions for a wide range of offshore and onshore facilities and vessels Transports crude oil, petroleum products and chemicals for the world’s largest oil companies, trading houses and refiners by operating 89 tankers around the world. Includes specialist services such as operating Dynamic Positioning Shuttle Tankers, MCVs and ship-to-ship transfers Provides technical management and operation services to operate LNG, petroleum and product fleets globally Delivers LNG to global customers through the operations of 29 LNG vessels, provide technological solutions for Floating Storage Units (FSU) and customised non-conventional LNG solutions FINANCIAL CAPITAL Our sources of financial capital to run our business and fund our growth comprise internally generated funds and debt financing NATURAL CAPITAL Our vessels rely heavily on fuel and water for their operations Our fleet comprises 29 LNG carriers, 89 petroleum and product tankers, 2 Floating Storage Units and 15 floating assets to serve our clients globally We own one of the largest marine and heavy engineering facilities in the region, including fabrication yards and dry docks, capable of constructing complex offshore mega structures, marine conversion and marine repairs FINANCIAL VALUE • RM1.47 billion operating profit • RM1.34 billion total dividends paid • Earnings per share of 29.4 sen • Consistent dividends of 30 sen per share over the last four years • Market capitalisation RM29.91 billion (USD7.42 billion) as at 31 December 2018 • Strongest credit rating in marine transport sector by Moody’s Investors Service and S&P Global Ratings OPERATIONAL VALUE • Excellent floating asset performance with uptime of >98% • Zero Port State Control (PSC) detention rate • High vessel availability rate of > 99% for our fleet • Local market leader in ship repair business. Completed marine repair & maintenance for 93 vessels • Our floating assets processed and stored an estimated 31% of Malaysia’s crude oil production • A market leader for lightering operations in the Gulf of Mexico for US Gulf ship-to-ship transfers • One of the world’s largest single owner and operator of LNG carriers. Transported 7% of world’s LNG (Source: IHS Markit) HUMAN CAPITAL VALUE • Established a Succession Planning Framework • Consistently amongst the top quartile for safety standards in shipping and offshore segment (Source: Intertanko and IOGP) • Group Lost Time Injury Frequency of 0.07 injuries per million hours worked • Group Total Recordable Case Frequency of 0.22 cases per million hours worked • RM5.44 million invested in training programmes with a total of 1,807 training days • RM1.57 billion spent on staff cost SOCIAL & RELATIONSHIP VALUE • Offers a complete range of maritime related courses that produced qualified officers to support manpower growth and development • Established programmes that promote education and awareness amongst the youth • Support development of industry standards • Compliance with regulations of the highest standard • Have a good, long-standing relationship with the world’s oil & gas players ENVIRONMENTAL VALUE • Zero incidents of major spills to the environment from all operations • Reductions in carbon emission intensity by 4%, 8% and 10% for our LNG, petroleum & product fleets respectively • Ship garbage generation reduced by 13% • Ozone depleting substances consumption reduced by 48% INTELLECTUAL CAPITAL Our intellectual capital includes specialist knowledge and experience in the areas of ship operation and management, ship-to-ship transfers, deepwater capabilities, fabrication of complex heavy engineering structures, marine repairs, and operating the only Modular Capture Vessels (MCV) in the world HUMAN CAPITAL We have over 8,500 dedicated, high performing and specialised personnel at sea and shore which we leverage on to steer our business and operate our ships and facilities efficiently and safely SOCIAL & RELATIONSHIP CAPITAL We develop strategic partnerships and trusted relationships with our key customers, suppliers, governments, regulators and industry bodies PHYSICAL CAPITAL All figures quoted are for Financial Year 2018 unless otherwise stated PETROLEUM & PRODUCT SHIPPING OFFSHORE HIGHLIGHTS OF THE YEAR OUR BUSINESS OUR LEADERSHIP OUR PERFORMANCE OUR COMMITMENT TO SUSTAINABILITY OUR GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 50 TH ANNUAL GENERAL MEETING 63 MISC BERHAD ANNUAL REPORT 2018 62