MISC Annual Report 2019

Our Performance MISC Group delivered another solid performance in 2019 and we have made good progress on our strategic initiatives as well as remaining on course in our long-term growth agenda. During the year, the Group secured over USD800 million worth of long-term projects in terms of capital expenditure. In addition, we secured another USD300 million worth of projects in early 2020. These contracts will go a long way in building and sustaining our business for many years to come. The contracts secured are a testament to MISC’s reputation as a competitive global shipping conglomerate that conducts itself at the highest industry leading standards. With the international oil majors as a part of MISC’s portfolio of long-term clients and a wide global presence that spans from South America to East Asia, it is also a clear indication that MISC is a reliable partner to various international energy players. In addition to the contracts we have secured, our financial performance in 2019 was indeed commendable. For the financial year ended 31 December 2019, MISC recorded a higher Group revenue of RM8,962.7 million which was 2.1% higher than the financial year of 2018, while Group profit before tax increased by 12.5% to RM1,512.3 million. The Group’s balance sheet remained healthy. We are in the favourable position of having a lower net debt to equity ratio of 0.17, compared to 0.20 in 2018; augmented by having one of the best credit ratings in the industry of Baa2 (Stable) by Moody’s Investors Service and BBB+ (stable) by S&P Global Ratings. Earnings per share for the financial year of 2019 is 32.0 sen, compared to 29.4 sen for the previous year. This has allowed the Board of Directors to remain committed to maintain its balanced policy of generating meaningful dividend yield on a sustainable basis. As such, in respect of the financial year ended 31 December 2019 taking into consideration the stronger performance, the Board has declared on a quarterly basis, a total tax-exempt dividend of 33 sen per share inclusive of a special dividend of 3 sen per share amounting to RM1,473.0 million for the financial year of 2019 compared to RM1,339.1 million previously. Driven by Our People The commitment of MISC’s workforce has been the very foundation of our accomplishments and the strong reputation that we have today in the maritime as well as the energy industry. Over the five years since joining MISC’s Board, I have been impressed by the depth and breadth of knowledge of the people and how they have mastered the technical capabilities so well. Our people will always remain instrumental in fostering stronger relationships with various stakeholders and business partners throughout the years, winning their trust and confidence with continuous assurance that we deliver on our promise of the highest standards without any compromise. Therefore, it is important for the Group to provide the workforce both at sea and shore with the conducive environment to cultivate their potential and enhance their capability to perform their jobs to the exacting world class standards demanded of the industry wherever they may be. We will also continue to attract the best people to build a talent pipeline that we can rely on to power us forward in the next period of growth. One of the efforts is through our maritime education and training academy, ALAM, which provides the avenue to nurture the next generation of seafarers and enabling them to develop their career potential in the maritime industry. Upholding Responsible Corporate Practices I am honoured that MISC’s commitment towards upholding integrity and sound corporate governance practices has been recognised at the Alpha Southeast Asia’s Annual Institutional Investor Awards for Corporates 2019 as the winner in the “Best Senior Management Investor Relations Support” category. MISC was also named as the first runner-up for two other categories, namely “Most Organised Investor Relations” and “Most Consistent Dividend Policy” and was named as second runner-up in the “Strongest Adherence to Corporate Governance” category. We have also been ranked by the Malaysian Institute of Corporate Governance (MICG) among the top 10 best scoring companies in corporate reporting transparency. Our commitment to the principles of corporate governance as well as robust risk management and internal control measures will augur well for us in the long term in strengthening investor confidence and safeguarding our corporate reputation as well as enhancing our ability to maximise shareholder value. Sustainability has always been an integral component of MISC’s overall business agenda. As one of the leading players in the international maritime industry, operating in a responsible manner and consistently stepping up the efforts to minimise our environmental footprint is a priority for the Group. Our structured approach focuses on the key areas of enhancing energy efficiency, reducing harmful emissions from our operations, conservation of marine biodiversity, as well as improving our waste management practices. The Board is in full support of the initiatives by the management to enhance our sustainability stewardship as well as create holistic value to our stakeholders. In Appreciation Our noteworthy accomplishments this year is made possible through the solid support from our stakeholders. Firstly, I would like to record my sincere appreciation to our customers, business partners and financiers for the unwavering trust that they have placed in us. My utmost gratitude to the management team and the people of MISC for their steadfast commitment and excellent work in helping us to deliver another successful year for the Group. I am also deeply grateful to my colleagues on the Board for their wise counsel and guidance as we navigate through the crests and troughs of the industry. On behalf of the Board of Directors of MISC, I would like to express our heartfelt appreciation to Pn. Fadzillah Kamaruddin, who has retired as the Company Secretary at the end of 2019, for her invaluable contribution over the past 12 years. Before I conclude, I would like to thank our shareholders for the faith you have placed in MISC and for being part of our growth journey. Together, we will create a sustainable future ahead, fuelled by the passion to explore the endless possibilities in moving energy to build a better world. DATO’ AB. HALIM MOHYIDDIN Chairman 20 March 2020 Chairman’s Message 17 THE YEAR IN REVIEW ANNUAL REPORT 2019 16 MISC BERHAD PEOPLE. PASSION. POSSIBILITIES