2 Overview 3 MISC’s 2024 Integrated Reporting Suite ABOUT THIS REPORT SEC 1 6 Who We Are 8 Our Businesses 12 How We Move Energy ABOUT MISC SEC 2 SEC 3 KEY MESSAGES 16 Chairman’s Message 20 President & Group Chief Executive Officer’s Message 24 Chief Strategy & Sustainability Officer’s Message 26 Chief Financial Officer’s Message SEC 4 HIGHLIGHTS 30 Key Highlights 2024 32 A Look Back at 2024 SEC 6 STRATEGIC REVIEW 52 Our Operating Environment 60 Our Material Matters 65 Our Risks and Mitigation Strategies 70 Delivering Our Strategy and Its Progress SEC 7 BUSINESS REVIEW 78 Gas Assets & Solutions 81 Petroleum & Products 84 Offshore 87 Marine & Heavy Engineering 90 Marine Services 94 Maritime Education & Training SEC 11 LEADERSHIP 132 Our Board at a Glance 132 Our Board of Directors 134 Profiles of the Board of Directors 140 Our Executive Leadership Team 142 Profiles of the Executive Leadership Team SEC 12 GOVERNANCE 150 Corporate Governance Overview Statement 173 Board Nomination & Remuneration Committee Report 180 Board Audit Committee Report 187 Board Sustainability & Risk Committee Report 192 Statement on Risk Management & Internal Control 209 Statement of Directors’ Responsibility 209 Additional Compliance Information SEC 9 FINANCIAL REVIEW 106 Group Financial Review 109 Financial Calendar 110 Five-Year Group Financial Performance 112 Statement of Value Added & Value Distributed SEC 10 ANCHORING SUSTAINABILITY 116 Sustainability Governance 119 ESG Risk Management 120 Sustainability Strategy and Its Key Progress in 2024 123 Contributing to the Sustainable Development Goals (SDGs) 124 Memberships and Associations 125 Climate-related Financial Disclosures 126 Bursa Malaysia Common Sustainability Matters and Indicators SEC 8 CORPORATE ENABLERS 100 People Development 101 Operating Safely & Sustainably 102 Operating Responsibly SEC 13 ADDITIONAL INFORMATION 212 Properties Owned by MISC Berhad and Its Subsidiaries 214 Statistics on Shareholdings 217 Corporate Information 218 List of Abbreviations SEC 14 ANNUAL GENERAL MEETING 224 Notice of Annual General Meeting Form of Proxy What’s Inside SEC 5 VALUE WE CREATE 40 Our Integrated Approach to Value Creation 42 Value Creation Business Model 44 Key Capitals 46 Engaging with Stakeholders NAVIGATION ICONS Key Capitals United Nations Sustainable Development Goals Physical P Human H Financial F Intellectual I Natural N Social & Relationship SR Material Matters Health and Safety Climate Change Energy Management Financial Performance Values, Governance and Business Ethics Human Rights Sustainable Supply Chain Ocean Health Security Talent Development and Retention Waste Management Diversity and Inclusion Digitalisation Cybersecurity Community Investment Stakeholders Employees Customers Government/Regulators Shareholders/Investors/Financial Services Providers Business Partners/Suppliers & Vendors Communities Industry Peers Media Academic Organisations Trade Associations/NGOs Risks Scan the QR code to download Integrated Annual Report 2024 on our website. Project Delivery Risk Energy Transition and Decarbonisation Risk Financial Risk Asset Integrity and Performance Risk Health, Safety, Security and Environment Risk Cybersecurity Risk Talent Risk Compliance and Regulatory Risk Market Risk Geopolitical Risk
MISC BERHAD INTEGRATED ANNUAL REPORT 2024 2 3 SECTION 1: ABOUT THIS REPORT www.miscgroup.com Overview REPORTING SCOPE AND BOUNDARIES This Integrated Annual Report (IAR) provides disclosures on MISC Berhad, its subsidiaries, associates and joint ventures, which are referred to as MISC or the Group throughout the report. It covers the full calendar year from 1 January to 31 December 2024, unless stated otherwise. The report may also include reporting on material events that occurred after this date up to the date of publication. The information presented relates to the Group’s business activities and operations, which cover Gas Assets & Solutions, Petroleum & Products, Offshore, Marine & Heavy Engineering, Marine Services and Maritime Education & Training. MATERIALITY The information presented in this IAR is based on material matters that are most important to our business and stakeholders. In determining our material matters, we took into consideration issues that impact our DATUK ABU HURAIRA ABU YAZID Chairman ZAHID OSMAN President & Group Chief Executive Officer We are pleased to present MISC Berhad’s (“MISC” or “the Group”) Integrated Annual Report 2024. The purpose of this report is to provide a balanced and fair assessment of how we create value for our diverse stakeholders. This report presents a factual narrative of our material matters, business strategies, risks, corporate governance, as well as financial and non-financial performance. It also seeks to underscore our relentless drive towards innovation and low-carbon solutions, creating value for our shareholders and stakeholders alike. ability to deploy our strategies or create shared value and long-term financial and non-financial performance, the risks identified and the interests of our key stakeholders. DEMONSTRATING OUR INTEGRATED THINKING We provide an overview of the Group’s ability to create value by implementing corporate and sustainability strategies. We identified the linkages, impacts and synergies between our financial and non-financial capitals, material topics, stakeholder expectations, strategic objectives, risks and opportunities. SUSTAINABILITY RISKS AND GOVERNANCE In all markets where we operate, material economic, environmental, social and governance (EES&G) principles are taken into consideration when creating our strategies, policies and initiatives. We have also integrated EES&G risk management approaches into our performance modelling. RESPONSIBILITY STATEMENT The Board of Directors acknowledges its responsibility in ensuring the integrity of the MISC Berhad Integrated Annual Report 2024. In the Board’s opinion, this report has addressed all material issues and matters and fairly presents the Group’s performance for the year 2024. This report has been prepared in accordance with the International Integrated Reporting <IR> Framework. Approved by the Board of Directors on 20 February 2025 and signed on behalf of the Board: ASSURANCE The financial information in this report is based on the consolidated Audited Financial Statements for the year ended 31 December 2024, audited by Ernst & Young PLT. In 2024, MISC conducted an independent limited assurance exercise for its greenhouse gas (GHG) emissions and safety performance data recorded in 2023 and 2024. The statement of assurance can be found in the Sustainability Report 2024. EXCLUSIONS The information is guided by our appetite for disclosure. We have withheld information that falls within the following categories: • Information that would jeopardise our strategic and competitive advantage; • Information that we are contractually precluded from sharing; and • Information which we are unable to verify. FORWARD-LOOKING STATEMENTS This IAR incorporates forward-looking statements that represent the Group’s expectations of its future value creation prospects. Given the dynamic nature of the operating environment and the inherent uncertainties within the industry in which MISC operates, actual outcomes may deviate from the projections outlined in the forward-looking statements. Thus, these statements should not be considered as an implicit or explicit guarantee of MISC’s future performance. MISC’s 2024 Integrated Reporting Suite Key Frameworks Applied IAR SR FR International <IR> Framework issued by the International Integrated Reporting Council (IIRC) √ Main Market Listing Requirements (MMLR) issued by Bursa Malaysia √ √ √ Companies Act 2016 (CA 2016) √ √ Malaysian Code on Corporate Governance 2021 √ √ √ Corporate Governance Guide (4th Edition) issued by Bursa Malaysia √ √ Malaysian Financial Reporting Standards (MFRS) √ √ International Financial Reporting Standards (IFRS) √ √ Bursa Malaysia Sustainability Reporting Guide √ Global Reporting Initiative (GRI) Standards √ Sustainability Accounting Standards Board (SASB) Standards √ FTSE4Good Bursa Malaysia Index √ Carbon Disclosure Project (CDP) √ MSCI ESG Ratings √ Morningstar Sustainalytics ESG Risk Ratings √ S&P Corporate Sustainability Assessment √ IFRS S2 Climate-related Disclosures √ AA1000 Stakeholder Engagement Standard √ United Nations Global Compact Guiding Principles √ United Nations Guiding Principles on Business and Human Rights √ Principles of Climate Governance by World Economic Forum √ United Nations Sustainable Development Goals (SDGs) √ INTEGRATED ANNUAL REPORT (IAR) 2024 Offers shareholders and stakeholders a balanced and comprehensive overview of our financial and non-financial performance. It includes insights into the external environment, our business model, strategy, achievements, financial statements, material matters, corporate governance and risk management. SUSTAINABILITY REPORT (SR) 2024 Details our initiatives, outcomes and performance in key Environmental, Social and Governance (ESG) areas, enhancing transparency in our ESG efforts. This report also encompasses our Climate-related Financial Disclosures Report. FINANCIAL REPORT (FR) 2024 Provides detailed financial disclosures, including the Directors’ Report, Audited Financial Statements and Independent Auditors’ Report, catering to shareholders, investors, analysts and other interested parties.
MISC BERHAD INTEGRATED ANNUAL REPORT 2024 4 5 SECTION 1: ABOUT THIS REPORT www.miscgroup.com SECTION 2 6 Who We Are 8 Our Businesses 12 How We Move Energy ABOUT MISC
INTEGRATED ANNUAL REPORT 2024 6 7 SECTION 2: ABOUT MISC www.miscgroup.com MISC BERHAD Who We Are Who We Are OUR STRENGTHS Sustainable partnerships with key industry players 2 Diversified business portfolio and track record of operational excellence 1 Stable cash flow with strong discipline in risk and financial management 3 Integrated commercial viability and ESG priorities in our business operations 4 Highly experienced leaders, operating within a strong governance framework 5 OUR KEY HIGHLIGHTS Proven Track Record Global Operations 56 years of experience in delivering energy-related maritime solutions and services Operating presence in 11 countries, moving energy across continents Market Strength Fleet Strength Strong Credit Ratings Among the world’s leading energy shipping and maritime solutions provider 102 modern fleet of LNG, Petroleum and Product vessels Baa2 (Stable) Market Capitalisation: RM33.9 billion BBB+ (Stable) Reputable Floating Production System Owner-Operator with 12 assets Over 9,000 sea and shore employees from over 40 diverse nationalities For more information, please refer to the MISC corporate website at www.miscgroup.com. Our principal businesses include energy shipping and its related activities, offshore floating solutions, marine repair and conversion, integrated marine services, port management and maritime services, as well as maritime education and training. Leveraging our extensive global presence, we deliver a comprehensive range of solutions across the maritime energy value chain. At the core of our success is a modern and diversified fleet of over 100 owned and in-chartered vessels, including liquefied natural gas carriers (LNGCs), petroleum tankers and offshore floating facilities, with a combined deadweight tonnage capacity exceeding 13 million tonnes. Powered by a diverse and skilled global workforce, our fleet ensures the safe and efficient transportation of energy resources worldwide. As a future-focused organisation, MISC is committed to advancing new energy solutions, underscoring our dedication to supporting the global energy transition while maintaining excellence in our core businesses. MISC Berhad is a global leader in energy-related maritime solutions and services, with 56 years of experience in the maritime industry. Our Vision To consistently provide better energy-related maritime solutions and services Our Mission To be consistently better, we strive to: • Exceed the expectations of our customers • Promote individual and team excellence of our employees • Create a positive difference to the lives of communities • Care for the environment and operate responsibly • Drive sustainable value for our shareholders Loyalty Loyal to corporation Integrity Honest and upright Professionalism Strive for excellence Cohesiveness United, trust and respect for each other OUR SHARED VALUES
INTEGRATED ANNUAL REPORT 2024 8 9 SECTION 2: ABOUT MISC www.miscgroup.com MISC BERHAD Our Businesses Our Businesses Fleet Strength 5 Moss-type LNGCs The Moss-type vessel has self-supporting spherical tanks that are robust and reduces sloshing. 22 Membrane-type LNGCs The membrane-type system has a higher capacity than Moss-type vessels due to its space-efficient containment systems. GAS ASSETS & SOLUTIONS Our Gas Assets & Solutions (GAS) segment specialises in transporting liquefied natural gas (LNG) and ethane, as well as providing asset-based solutions, leveraging decades of expertise. We prioritise operational excellence, backed by a strong track record of timely deliveries, while selectively investing in modern, fuel-efficient assets and venturing into new energy solutions to solidify our role in the global energy transition. Please refer to Gas Assets & Solutions Business Review on page 78 for more information. 19 vessels under construction 36 vessels 1 FSU under conversion 1 Semi-submersible Floating Production System (Semi-FPS) A Semi-FPS is an offshore platform that floats on the surface of the water, supported by submerged pontoons. It is equipped with production facilities to process hydrocarbons by separating fluids received from a subsea reservoir through risers into crude oil, natural gas, water and impurities. The extracted oil is exported via pipeline to an oil and gas terminal, operating at a depth of approximately 1,400 meters. Please refer to Offshore Business Review on page 84 for more information. OFFSHORE We are owners and operators of floating production systems across various locations globally, offering a comprehensive suite of services tailored to meet the dynamic floating solutions needs of the offshore business landscape, from shallow to ultra-deepwater field developments. 12 offshore floating solutions As at 20 February 2025 Fleet Strength 6 Floating Production, Storage and Offloading (FPSOs) An FPSO is a vessel-type unit that combines the functions of production, storage and offloading of oil and gas. It is equipped with processing facilities and designed for permanent mooring at a location for long periods i.e. 20 years or more of continuous operations. The production facilities on board separate oil, gas and water from hydrocarbons received from a subsea reservoir. After processing, the oil is stored in the FPSO’s tanks and later offloaded to shuttle tankers or pipelines to onshore receiving facilities. 5 Floating Storage and Offloading (FSOs) An FSO unit is primarily used for the storage and offloading of oil and gas and it does not have any production processing capabilities. It is normally integrated with other production systems, such as fixed platforms, mobile offshore production units and tension leg platforms. FSOs receive hydrocarbons from nearby production platforms or subsea wells, store them and later offload the stored oil to a shuttle tanker. 6 Suezmax Tankers A Suezmax tanker has a capacity of approximately one million barrels of crude oil, with the flexibility to ship both long-haul cargo and shorter, regional trades. 13 Very Large Crude Carriers (VLCCs) A VLCC has the capacity to transport approximately two million barrels of crude oil over long distances to facilitate global trades. PETROLEUM & PRODUCTS We operate a modern and diverse fleet of petroleum and product tankers, including specialised vessels such as Dynamic Positioning Shuttle Tankers and Modular Capture Vessels. Our fleet is designed to deliver petroleum and refined products with a focus on safety, reliability and efficiency. Aligned with our commitment to sustainable shipping, we are advancing decarbonisation efforts through the development of LNG and ammonia dual-fuel vessels. 5 vessels under construction 66 vessels Please refer to Petroleum & Products Business Review on page 81 for more information. Fleet Strength 2 Long Range 2 (LR2) Tankers An LR2 tanker is a coated tanker with the capacity to transport approximately 0.7 million barrels of oil. It can carry both clean and dirty products and is mainly utilised for regional trade. 8 Lightering Support Vessels (LSVs) An LSV transports equipment and crew that are required to perform STS cargo transfer operations. 17 Dynamic Positioning Shuttle Tankers (DPSTs) A DPST utilises dynamic positioning technology to maintain a fixed position while loading crude oil from remote offshore production facilities located in deepwater and/or harsh weather conditions, transporting it to shore for storage or refining. 20 Aframax Tankers* An Aframax tanker has the capacity to transport approximately 0.7 million barrels of crude oil. It is used to carry crude oil or dirty products, such as fuel oil, in mainly regional trade. * Includes two modular capture vessels (MCVs). 1 LNG Bunker Vessel (LBV) An LBV supplies LNG as marine fuel (bunker) to LNG-fuelled vessels via ship-to-ship (STS) transfer operations. 2 Floating Storage Units (FSUs) An FSU is a flexible LNG storage solution and an alternative to land-based facilities. 6 Very Large Ethane Carriers (VLECs) A VLEC is a specialised gas carrier that transports liquefied ethane at -94° Celsius in membrane tanks over long distances. The vessel is equipped with dual-fuel propulsion and reliquefaction systems.
INTEGRATED ANNUAL REPORT 2024 10 11 SECTION 2: ABOUT MISC www.miscgroup.com MISC BERHAD Our Businesses Our Businesses Key Facilities Key Services Key Services MARINE & HEAVY ENGINEERING As a premier energy and marine solutions provider, our Marine & Heavy Engineering segment operates one of the largest fabrication yards in Southeast Asia. We specialise in offshore construction, including deepwater facilities, marine repair, conversion services and marine refurbishment, with a niche focus on LNGCs. Leveraging our extensive expertise, we construct carbon capture facilities, advanced offshore wind farm substations, and provide fabrication services for green hydrogen facilities. Please refer to Marine & Heavy Engineering Business Review on page 87 for more information. MARINE SERVICES We provide a comprehensive range of solutions including ship management, port and terminal operations, port engineering and maintenance and marine assurance services. Our services are designed to cater to the evolving needs of our diverse clientele and anticipated shifts in the industry. We actively support the Group’s decarbonisation goals by cultivating talents with expertise in future-fuel solutions. Please refer to Marine Services Business Review on page 90 for more information. MARITIME EDUCATION & TRAINING Akademi Laut Malaysia (ALAM) offers a spectrum of maritime courses including nautical and marine engineering programmes, maritime and offshore safety courses, simulator-based courses and maritime management programmes, as well as research and consultancy services. Through strategic partnerships with leading academic institutions and industry pioneers, we enhance research, develop future-ready talent and address critical industry challenges. Please refer to Maritime Education & Training Business Review on page 94 for more information. Marine Business Our well-equipped yard includes three dry docks, land berths, quays and a shiplift. These facilities enable us to perform repair works, maintenance, marine conversion and refurbishment for a wide range of vessels. Heavy Engineering We have the largest fabrication area by tonnage capacity in Malaysia, to provide engineering, procurement, construction, installation and commissioning (EPCIC) of complex structures for offshore and onshore facilities. Ship Management Services • Ship management, engineering and procurement • Project management: Supervision and consultancy services for dry docking and newbuilding of vessels Port Management & Maritime Services • Port and Terminal Management: Port and terminal operations, pilotage, mooring master, loading master and marine controller, jetty maintenance and single point mooring (SPM) maintenance • Port Engineering and Maintenance: Jetty maintenance, SPM maintenance, SPM refurbishment and dredging activities • Marine Services: Ship vetting, offshore vessel inspection, marine assurance and consultancy (Ship Screening, Tanker Management Self-Assessment, Offshore Vessel Management and Self-Assessment and Roving Marine Marshall Services) Pre-Sea Diploma, Post-Sea, Ratings and Modular Programmes We provide a broad spectrum of maritime education and training, beyond the Standards of Training, Certification and Watchkeeping (STCW) Research & Consultancy Services Through our research and consultancy experts, we provide flexible solutions encompassing the total lifecycle of port development
INTEGRATED ANNUAL REPORT 2024 12 13 SECTION 2: ABOUT MISC www.miscgroup.com MISC BERHAD Marine Services Gas Assets & Solutions Offshore Petroleum & Products Marine & Heavy Engineering Related Activities in Oil and Gas Value Chain Maritime Education & Training Complete/Full Range Offshore Platform EPCIC Services for Offshore & Onshore Construction Marine Conversion Works Ship Management Comprehensive Marine Repair & Refurbishment We are proactively transitioning to new energy solutions to reduce emissions and ensure compliance with evolving local and international maritime regulations. By fostering innovation, sustainability and operational excellence, we strive to contribute to a resilient and responsible energy future. MISC holds a crucial position in the energy value chain as an effective long-distance commodities transporter and maritime assets supplier for offshore oil and gas extraction. How We Move Energy How We Move Energy MISC Businesses and Activities
INTEGRATED ANNUAL REPORT 2024 14 15 SECTION 2: ABOUT MISC www.miscgroup.com MISC BERHAD SECTION 3 16 Chairman’s Message 20 President & Group Chief Executive Officer’s Message 24 Chief Strategy & Sustainability Officer’s Message 26 Chief Financial Officer’s Message KEY MESSAGES
INTEGRATED ANNUAL REPORT 2024 16 17 SECTION 3: KEY MESSAGES www.miscgroup.com MISC BERHAD Chairman’s Message NAVIGATING A COMPLEX OPERATING LANDSCAPE The macroeconomic and geopolitical environment in 2024 remained uncertain, presenting both risks and opportunities. However, with our strategic focus on advancing MISC’s low-carbon future while strengthening our core businesses, we continued to explore growth opportunities to drive meaningful progress. Geopolitical tensions disrupted trade flows, causing increased tonne-mile demand and operational risks. Sanctions on Russian oil and gas have reshaped global trade, resulting in longer voyage distances, while instability in the Middle East has forced vessels to reroute around the Cape of Good Hope. Despite these headwinds, MISC remained agile, ensuring operational stability, safeguarding our crew and vessels and delivering reliable service to our clients. The LNG sector faced challenges due to liquefaction project delays and a high number of new LNGC deliveries, which led to weakening charter rates, particularly for steam vessels. In response, we are rejuvenating our LNGC fleet with modern and lower-carbon emissions vessels secured under long-term contracts, strengthening revenue stability and ensuring consistent cash flow in the future. Additionally, with heightened regulatory requirements from the International Maritime Organization (IMO) and the European Union (EU), we have strengthened our decarbonisation efforts. This involves upgrading our fleet with LNG dual-fuel and ammonia-ready vessels and exploring other future fuels as well as abatement technologies to achieve a targeted 50% reduction in GHG emissions by 2030. We continued embedding our Internal Carbon Pricing (ICP) Framework into our project assessments and investment decisions, ensuring readiness for the anticipated global carbon taxes. Chairman’s Message RE-ENERGISED FOCUS, RESILIENT ACHIEVEMENTS Amidst a rapidly changing environment, MISC has strategically refined its focus while building a foundation for sustainable growth. In 2024, we moved forward with MISC 2030 Ambition by prioritising three key pillars: Resilient Core, Profitable New Energy Business and Decarbonisation. Through targeted emphasis on these areas, we have achieved balanced progress in fortifying our core operations, venturing into the new energy sector and adhering to evolving regulatory requirements. In 2024, we accomplished a significant milestone following the successful delivery of FPSO Marechal Duque de Caxias after it achieved its first oil on 30 October. Being our largest investment to date, it demonstrates our ability to manage complex projects despite pandemic-related disruptions. Our Marine & Heavy Engineering segment also recorded a turnaround, driven by improved project delivery and financial performance, culminating in the delivery of key projects, such as the Jerun Development and Rosmari-Marjoram Gas projects. In future fuel innovations, MISC has made significant advancements in ammonia dual-fuel technology. A milestone this year was AET’s groundbreaking long-term charter agreement with PETCO Trading Labuan Company Ltd. (PTLCL) for the deployment of the world’s first two ammonia dual-fuel Aframaxes. As part of the PETRONAS Group’s Gas and Maritime division, we will continue to explore new value-creation opportunities and synergies by aligning the core aspects of our business. Strengthening our partnership with PETRONAS, we have signed Time Charter Parties (TCPs) for two new LNGCs, each secured under firm 15-year contracts. DELIVERING CONSISTENT RETURNS Amidst prevailing market uncertainties, MISC remained financially resilient. The Group recorded a profit before tax of RM1,283.5 million, lower than in 2023 due to headwinds in the Gas Assets & Solutions and Offshore segments. Despite these challenges, the Group’s cash flow remained strong. Accordingly, the Board declared a dividend of 36 sen per share, reflecting our ability to deliver sustainable returns consistently. In 2024, we accomplished a significant milestone with the FPSO Marechal Duque de Caxias achieving first oil on 30 October. Dear Stakeholders, 2024 was a defining chapter in MISC’s journey, a year marked by both challenges and strategic milestones that reinforced our commitment to long-term value creation. We navigated a dynamic and evolving landscape influenced by geopolitical tensions, economic challenges, regulatory demands and the ongoing energy transition. MISC responded with a re-energised strategic focus, operational agility and a steadfast approach to decarbonisation. Through these efforts, we charted the way forward and continued to create value for stakeholders while building a more resilient and future-ready MISC.
INTEGRATED ANNUAL REPORT 2024 18 19 SECTION 3: KEY MESSAGES www.miscgroup.com MISC BERHAD Chairman’s Message STRENGTHENING TRANSPARENCY AND ACCOUNTABILITY Governance is a fundamental pillar of MISC’s operations, ensuring that corporate responsibility and integrity are upheld to the highest standards. A key initiative was the establishment of Director’s Conflict of Interest (COI) Review Procedures to ensure that compliance with reporting and disclosure requirements are met, while fostering a culture of accountability and integrity. To ensure long-term stability, we prioritised senior management succession planning, equipping MISC with a strong pipeline of capable leaders to drive the Group’s continued growth and resilience. Additionally, with the introduction of the MISC Human Rights Policy, we embedded a risk-based approach to identifying and mitigating potential human rights impacts, aligning our operations with international human rights standards. Reinforcing a culture of ethical conduct and regulatory compliance, Board members also participated in mandatory training to uphold robust governance practices. RECOGNISING EXCELLENCE ACROSS OUR ACHIEVEMENTS Our achievements in 2024 earned industry recognition, underscoring our commitment to excellence. AET was named joint winner of Tanker Operator of the Year at The Tanker Shipping & Trade 2024 Awards. MISC’s dedication to sustainability earned us the Silver Award at The Edge ESG Awards 2024, marking our third win in the Transport & Logistics Sector category. Additionally, MISC received the Industry Excellence Award in Transportation & Logistics at the National Corporate Governance & Sustainability Awards 2024 and was recognised among Malaysia’s Top 25 Overall Excellence Award winners. Chairman’s Message AET’s financing innovation was accorded the Islamic Finance Deal of the Year by EuroMoney for its USD100 million sustainability-linked Islamic revolving credit facility. AET also secured two awards in the Best Sustainability-Linked Financing category at The Asset’s Triple A Islamic Finance Awards 2024. CHARTING A COURSE FOR SUSTAINABLE GROWTH Looking ahead, the maritime landscape will continue to be shaped by geopolitical shifts, economic pressures and evolving regulations. Navigating this environment requires agility, foresight and decisive action to manage risks and capitalise on opportunities. MISC remains committed to sustainable growth, founded on a resilient business model, disciplined financial management and a clear sustainability agenda. We are aligned with international climate goals to maintain business continuity and competitiveness. Our target to achieve a 50% reduction in GHG emissions by 2030 underscores our proactive approach to leading a sustainable maritime future. I would like to extend my gratitude to all our stakeholders for their continued trust and support, which have been vital to MISC’s progress. To our shareholders, your confidence is our strength. Despite the challenging operating environment, we remain dedicated to delivering sustainable value and fostering MISC’s growth. Your trust drives our perseverance and innovation as we chart our path forward. To my fellow Board members, I sincerely appreciate your guidance and teamwork. Your strategic insights and leadership have been essential in steering us through complexities and keeping our focus on long-term growth and sustainability. To our management team and employees, your dedication and innovative spirit continue to drive our progress. Your passion and hard work keep MISC on an even keel, ensuring we remain at the forefront of our industry. We take pride in fostering strong connections between leadership and our workforce through initiatives such as Health, Safety, Security and Environment (HSSE) moments and direct engagement with the Board. These interactions cultivate a culture of inclusiveness and collaboration, strengthening MISC from within. Finally, to our customers, business partners and communities, your continued trust and collaboration are vital to our journey. Together, we are building a future characterised by excellence, sustainability and impactful progress for generations to come. DATUK ABU HURAIRA ABU YAZID Chairman, Independent Non-Executive Director ACKNOWLEDGEMENTS AET was named joint winner of Tanker Operator of the Year at The Tanker Shipping & Trade 2024 Awards. MISC is dedicated to nurturing future maritime professionals, continuously investing in maritime talent development through ALAM. In 2024, we allocated RM21.0 million to sponsor 732 cadets, demonstrating our commitment to building a skilled maritime workforce. Complementing this effort, we strengthened our unwavering dedication to diversity and inclusive leadership with three female Captains actively serving in command roles. In 2024, we sponsored RM21.0 million to further the education of 732 cadets. AFFIRMATION OF MISC’S STRONG BOARD AND LEADERSHIP TEAM In 2024, MISC recorded some changes in the Board, adding new skills and capabilities. On behalf of the Board, I am pleased to welcome Datuk Adif Zulkifli as a Non-Independent Non-Executive Director. His extensive experience and expertise will drive MISC’s continued growth and success. Another essential aspect of our leadership strategy is succession planning. En. Zahid Osman, the former Chief Operating Officer of MISC, took over as President & Group CEO after Captain Rajalingam Subramaniam’s departure in August. En. Zahid Osman seamlessly transitioned into the role with his extensive experience and deep understanding of the company, ensuring a smooth leadership change. This transition also played a key role in streamlining the executive leadership team, reinforcing leadership continuity and supporting long-term stability. On behalf of the Group, I would like to express our heartfelt appreciation and gratitude to Captain Rajalingam Subramaniam for his exceptional leadership at MISC. With a distinguished career spanning over 40 years in the maritime industry, starting as a cadet and progressing through various management and leadership roles within the Group, his contributions have been invaluable. I would also like to warmly welcome En. Zahid Osman and reaffirm our complete trust and confidence in his ability to lead MISC forward, delivering progress and success.
INTEGRATED ANNUAL REPORT 2024 20 21 SECTION 3: KEY MESSAGES www.miscgroup.com MISC BERHAD President & Group Chief Executive Officer’s Message RESILIENT PERFORMANCE AMIDST MARKET CHALLENGES In a year marked by global volatility and evolving market dynamics, MISC maintained strategic discipline, effectively managing challenges while staying focused on sustainable growth and long-term value creation. For the financial year 2024, we recorded a revenue of RM13,237.5 million compared to RM14,271.7 million the year before. Our profit before tax (PBT) stood at RM1,283.5 million, down from RM2,093.7 million, primarily due to headwinds in our GAS Business and Offshore segments. The GAS Business segment was impacted by lower spot rates, driven by increased vessel availability from new LNGC deliveries into the LNG shipping market and delayed liquefaction projects, leading to impairments that affected financial performance. Simultaneously, the Offshore segment experienced reduced construction margins and project close-out costs as major projects neared completion. However, excluding impairments, our adjusted PBT remained largely consistent with the previous year’s adjusted PBT. Despite these challenges, our Petroleum & Products segment delivered commendable results and the turnaround of the Marine & Heavy Engineering segment (MHB) further supported our financial performance. Cash flows from operations (CFO) remained strong at RM4,276.9 million. Adjusting for non-recurring factors, such as one-off prepayments for FSUs received in 2023, our operational cash flow for 2024 continued to reflect the Group’s financial resilience. President & Group Chief Executive Officer’s Message AET achieved a notable milestone by securing long-term charters for the world’s first two ammonia dual-fuel Aframaxes. #deliveringProgress TOWARDS OUR MISC 2030 AMBITION In 2024, we accelerated the execution of our re-energised strategy, the MISC 2030 Ambition. In a bold shift from intentions to execution, this sharpened direction embodies delivering energy more efficiently and with lower emissions. Our efforts remained focused on strengthening our core businesses, expanding into profitable new energy ventures and accelerating decarbonisation initiatives. With a well-diversified portfolio, our core businesses provide a solid foundation for long-term growth, while unlocking opportunities in emerging energy solutions. A key milestone in 2024 was the successful delivery of FPSO Marechal Duque de Caxias, which achieved first oil on 30 October 2024 and Final Acceptance on 2 November 2024, following a successful 72-hour performance test. This achievement exemplifies our technical expertise and strengthens our standing in the global deepwater FPSO sector. AET delivered Eagle Veracruz, its third LNG dual-fuel VLCC, to Shell Tankers (Singapore) Private Limited, demonstrating our commitment to more efficient, lower-emission shipping solutions. Significant strides were made in rejuvenating our LNGC fleet, a proactive move to strengthen our GAS Business segment, improve cash flow and advance our decarbonisation strategy. We secured long-term TCPs with QatarEnergy for three newbuild LNGCs scheduled for delivery in 2026 and 2027. Additionally, we signed long-term TCPs with PETRONAS LNG Ltd. (PLL) for two newbuild LNGCs scheduled for delivery in 2027, further strengthening our LNG shipping portfolio. As part of our fleet rejuvenation strategy, we also monetised three LNGCs that completed their long-term charters to reinvest in modern and energy-efficient vessels. Furthermore, we formalised the New Energy and Decarbonisation (NED) division to spearhead strategic investments in carbon abatement and new energy solutions. NED, together with our business units within the Group, will drive the development and commercialisation of new energy initiatives integral to the future of maritime energy solutions, emissions reduction and alignment with our sustainability goals. Dear Stakeholders, 2024 was a pivotal year for MISC, one defined by strategic progress amidst an increasingly complex global environment. The year unfolded against a backdrop of geopolitical and economic uncertainties, from trade flow disruptions due to global conflicts to heightened regulatory demands reshaping the maritime sector. Despite these challenges, MISC remained resilient, responding with agility and a re-energised strategic focus to advance our growth trajectory and deliver value to our stakeholders. Since assuming the role of President & Group CEO in August 2024, I have had the privilege of witnessing the unwavering dedication of our people firsthand. Their commitment continues to drive our achievements, enabling us to navigate uncertainty with confidence and purpose.
INTEGRATED ANNUAL REPORT 2024 22 23 SECTION 3: KEY MESSAGES www.miscgroup.com MISC BERHAD A notable milestone in our new energy venture was AET’s long-term charters with PTLCL for the world’s first two ammonia dual-fuel Aframaxes, with delivery expected in 2027. We also advanced our decarbonisation agenda through a Memorandum of Understanding (MoU) with Aker Solutions, PETRONAS Carigali Sdn. Bhd. and Clean Energy Systems Inc to develop a pilot Zero Emission Power Station (ZEUS), leveraging oxyfuel combustion for immediate carbon capture and storage (CCS). Additionally, we will explore opportunities in integrated shipping and floating solutions for ammonia through our collaboration with PETRONAS Group. Expanding into renewable energy ventures, our subsidiary MHB secured its second offshore substation (OSS) project in the Netherlands to construct a high-voltage direct current (HVDC) platform under TenneT’s 2-Gigawatt (2GW) Programme. To drive effective execution of our strategies, we implemented a refreshed management structure in January 2025, fostering an enterprise-wide mindset, essential in ensuring agility in a dynamic business environment. Grounded in accountability, transparency and efficiency, this structure empowers our leaders to make decisive and market responsive decisions. COMMITMENT TO OUR PEOPLE, SAFETY AND FUTURE Our people continue to be the driving force behind MISC’s success. We are committed to fostering a supportive, inclusive and empowering environment where talents thrive and contribute meaningfully to our shared goals. As we close another defining year for MISC, I am reminded that our achievements are the result of the collective dedication, passion and hard work of many. Our journey through 2024 was made possible by the unwavering support of our employees, stakeholders, customers and partners. To our Board of Directors, your guidance and wisdom continue to be a source of strength, enabling the Group to navigate complexities and seize opportunities for sustainable growth. To our employees, I offer my deepest appreciation. It is your commitment and drive that form the backbone of MISC’s achievements. Your ability to adapt, innovate and lead in a constantly evolving environment is what enables us to remain resilient and forward-thinking. To our stakeholders, thank you for your trust and confidence. Your continuous support fuels our ambition and strengthens our resolve to deliver consistent, long-term value. Together, we will build on our legacy, strengthen our leadership and drive meaningful progress towards a more sustainable future. MISC will continue to lead with purpose and ambition, delivering lasting value for all. ZAHID OSMAN President & Group Chief Executive Officer ACKNOWLEDGEMENTS President & Group Chief Executive Officer’s Message President & Group Chief Executive Officer’s Message Eagle Veracruz and Eagle Ventura were awarded Green Ship status. Our subsidiary MHB secured its second offshore substation project in the Netherlands to construct a high-voltage direct current platform under TenneT’s 2-Gigawatt Programme. Our HR Transformation Project aligns human resources with our long-term strategic ambitions, ensuring we are well-equipped for the future. We continue to invest in targeted development initiatives that nurture leadership capabilities and foster innovation. At the same time, our focus on Diversity and Inclusion is steadfast, with initiatives such as ‘The Platform Series’ and the Conscious Inclusion Programme raising awareness of unconscious biases and promoting inclusive leadership practices. At MISC, safety is not just a priority, but also a core value embedded into our culture. Our safety culture is built on the principles of Care and Comply. Care reflects our commitment to doing the right thing out of genuine concern for the well-being of those around us, while Comply reinforces the non-negotiable importance of adhering to safety rules and procedures. Following unfortunate safety-related incidents in 2024, including a fatality, we took immediate and comprehensive remedial actions to further strengthen our HSSE policies and procedures. This included conducting a Safety Culture Assessment, identifying gaps and enhancing our frontline safety processes and contractor management systems. AWARDS AND ACCOLADES In 2024, MISC and its subsidiaries received numerous industry accolades, reinforcing our commitment to operational excellence, safety and sustainability. MISC received the Jones F. Devlin Safety Award for 47 vessels, along with an Environmental Achievement Award for 57 vessels. AET was recognised as joint winner for Tanker Operator of the Year at The Tanker Shipping & Trade 2024 Awards. Our dedication to sustainable shipping was further acknowledged when AET’s LNG dual-fuel VLCCs, Eagle Veracruz and Eagle Ventura, were awarded Green Ship status under the Maritime and Port Authority of Singapore’s (MPA) Green Ship Programme. At the 42nd Malaysian Society for Occupational Safety and Health Awards 2024, MISC secured seven awards across various operational categories, underscoring our unwavering commitment to safety excellence. SEIZING OPPORTUNITIES IN A SHIFTING ENERGY LANDSCAPE As we enter 2025, we remain steadfast in our commitment to navigating geopolitical tensions, economic uncertainties, stricter decarbonisation regulations and the energy transition. While risks persist, including conflicts in the Middle East and the Russia-Ukraine war, escalating trade tensions disrupting supply chains and shipping, as well as China’s economic slowdown, we see significant opportunities in emerging energy solutions. As part of PETRONAS Group’s Gas and Maritime division, we will strategically align our priorities to unlock new value and drive operational synergies. At the same time, we remain committed to forging strategic partnerships to rejuvenate our fleet and support decarbonisation through ammonia dual-fuel vessels, carbon value chains and the development of hydrogen and ammonia transportation solutions. Our initiatives, including collaborations with PETRONAS and other industry partners, will focus on lowering GHG emissions through investments in dual-fuel assets, enhancing operational efficiency and integrating responsible supply chain practices. Even as we acknowledge challenges ahead, we are confident in our ability to seize opportunities, further develop our position in the global energy market and drive long-term value creation.
INTEGRATED ANNUAL REPORT 2024 24 25 SECTION 3: KEY MESSAGES www.miscgroup.com MISC BERHAD Chief Strategy & Sustainability Officer’s Message Dear Stakeholders, The past year has seen significant shifts in the global economy, geopolitical landscape and energy markets. In this evolving environment, the Group has focused on strengthening core businesses, expanding into new energy markets and advancing decarbonisation efforts. Navigating these changes requires agility, balancing long-term growth with the transition to a low-carbon economy while ensuring resilience in a complex operating landscape. NAVIGATING MARKET UNCERTAINTIES AND PROGRESSING ENERGY TRANSITION In 2024, geopolitical developments played a central role in shaping global trade and energy markets. Rising tensions in key maritime routes, particularly in the Middle East, disrupted global shipping, leading to vessel rerouting and logistical challenges. Meanwhile, the Russia-Ukraine conflict continued to reshape trade flows, with businesses reassessing supply chain dependencies and market access. Political transitions added further uncertainty, as new policies took shape following elections in over 70 countries, including the United States. These developments brought on both risks and opportunities, requiring close monitoring to assess potential implications to global energy supply chains and inflationary pressures. Within the shipping industry, these shifts influenced market dynamics. The LNG sector experienced an increase in vessel availability, while delays in liquefaction projects affected demand for LNGCs. In contrast, petroleum tanker rates remained stable, supported by sustained tonne-mile demand and a historically low number of newbuild deliveries. The FPSO market continued to gain momentum, driven by increased offshore exploration and long-term production investments, particularly in Africa and Brazil’s pre-salt fields. Regulatory developments are also shaping the future of the maritime industry. Stricter decarbonisation measures introduced under the IMO Framework are now in effect, with preparations underway for the full enforcement of the EU’s Emissions Trading System (ETS) and the 2025 FuelEU Maritime Regulation. In Malaysia, the anticipated Climate Change Bill and carbon tax on high-emission industries will further shape our domestic sustainability strategy. These evolving regulations will accelerate the industry’s transition towards eco-efficient vessels and alternative fuels. DELIVERING ON STRATEGIC PRIORITIES Our strategic focus in 2024 was anchored on three key pillars: Business Model Transformation, Strategic Partnerships and Client Positioning and Organisational Culture and Behaviour. These pillars directed our efforts towards financial resilience, sustainable growth and environmental stewardship by strengthening core revenue streams, expanding into new energy ventures and ensuring long-term competitiveness. Our achievements during the year reflect our commitment to this strategic focus. Project delivery remained a priority. A key milestone was the successful delivery of FPSO Marechal Duque de Caxias, achieving first oil on 30 October 2024. This achievement underscores our ability to execute complex deepwater offshore projects despite pandemic-related disruptions. The FPSO, which is now fully operational, reinforces our offshore presence while securing long-term revenue stability. We also took proactive steps to rejuvenate our LNG fleet, securing long-term charters with PETRONAS and QatarEnergy for five newbuild LNGCs. Chief Strategy & Sustainability Officer’s Message With a steady pipeline of deliveries from 2025 to 2027, we remain on track to expand our fleet with modern, eco-efficient LNGCs. Aligning with our objective to optimise our fleet, we successfully concluded the sale of three LNGCs: Portovenere, Lerici and Puteri Intan, unlocking capital for reinvestment into newer and more efficient vessels. Additionally, we optimised our FPSO portfolio through the acquisition of SBM’s 49% equity stake in FPSO Kikeh and the divestment of our 49% stake in FPSO Espirito Santo, aligning our asset base with long-term value creation. To accelerate our energy transition ambitions, we formalised the NED division within MISC, which will work collaboratively with our core business segments to drive strategic investments in carbon abatement and sustainable solutions. We also enhanced operational efficiencies by establishing Marine Services on 1 April 2024, through the successful integration of Eaglestar Marine Holdings (L) Pte. Ltd. (Eaglestar) and MISC Maritime Services Sdn. Bhd. (MMS) to deliver enhanced maritime services. Beyond strengthening core operations, our investments in sustainability yielded measurable progress. The Group recorded a 32% reduction in average GHG intensity from the gas and petroleum fleet compared to 2008 levels. Building on this momentum, we secured long-term charters with PETRONAS’ trading arm, PTLCL, for the world’s first two ammonia dual-fuel Aframax tankers, further reinforcing our decarbonisation efforts. Further strengthening its renewables footprint, MHB secured its second offshore wind project to construct an OSS HVDC platform, as part of TenneT’s 2GW Programme in the Netherlands. Industry recognition highlighted the impact of these efforts. AET’s LNG dual-fuel VLCCs, Eagle Veracruz and Eagle Ventura, were awarded Green Ship status under MPA’s Green Ship Programme. Additionally, the Group was honoured with the Industry Excellence Award in Transportation & Logistics at the National Corporate Governance & Sustainability Awards 2024. CHARTING A LOW-CARBON FUTURE WITH MISC 2030 AMBITION As part of our long-term vision, the Group refined its strategic direction, transitioning from the MISC 2030 Aspiration to the MISC 2030 Ambition. This renewed strategy is anchored on three focus areas: Resilient Core, Profitable New Energy Business and Decarbonisation. MISC’s Resilient Core remains the foundation of our business, ensuring operational excellence and financial discipline. We are advancing fleet rejuvenation, enhancing asset utilisation and optimising cost efficiency, while upholding safety and quality standards. By strengthening project execution and unlocking value through the strategic monetisation of our assets, we continue to reinforce long-term resilience. At the same time, we are driving a Profitable New Energy Business by expanding into carbon capture, offshore wind and alternative fuels. Through strategic partnerships and integrated value offerings, MISC is positioning itself as a key player in the maritime solutions value chain, ensuring sustainable and commercially viable growth in emerging energy markets. Aligned with our sustainability commitments, decarbonisation is central to our strategy. We will continue to adopt emissions reduction technologies and invest in lower carbon solutions as part of our strategy. Our transition is further supported by dual-fuel assets and a responsible supply chain approach, enabling MISC to navigate the evolving energy landscape with a reduced carbon footprint. Through these three focus areas, MISC 2030 Ambition sets a clear path towards a low-carbon future, balancing profitability with sustainability to drive long-term value creation. To further support our MISC 2030 Ambition, we will continue to prioritise environmental conservation, investments in people and communities, as well as upholding good governance practices. In 2024, we launched a new Human Rights policy which replaced the previous Human Rights Commitment and Modern Slavery Policy, to strengthen responsible business practices across our operations and supply chains. FUTURE OUTLOOK Geopolitical conflicts and shifting alliances are driving a more polarised world, increasing economic uncertainty and trade disruptions. The shipping industry must brace for volatility in 2025 due to shifting trade flows and new environmental regulations. Strong oil and gas demand, particularly in Asia, will support tanker demand. At the same time, with renewables outpacing fossil fuel investments, stricter IMO regulations will accelerate decarbonisation through alternative fuels, greater energy efficiency and the prospect of carbon pricing mechanisms. We are committed to creating value across a diverse business portfolio. Fleet rejuvenation will continue, improving operational efficiency and strengthening our market position. At the same time, development in the global energy transition, renewable energy and low-carbon fuel value chains, will be actively pursued to support long-term growth. Robust risk management will also remain central in our business conversations as we navigate the uncertain landscape. With a disciplined approach, the Group is positioned to generate sustainable value for our stakeholders and shape a future-ready MISC. RAJA AZLAN SHAH RAJA AZWA Chief Strategy & Sustainability Officer
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