INTEGRATED ANNUAL REPORT 2024 88 89 SECTION 7: BUSINESS REVIEW www.miscgroup.com MISC BERHAD Marine & Heavy Engineering KEY FOCUS AREAS & RESULTS Focus Area What We Did in 2024 Results Project Delivery Excellence Consistent Project Delivery Heavy Engineering • Delivered projects successfully within scope • Successfully delivered SK408W Jerun Development Project with the sailaway of the central processing platform (CPP) Topside in February 2024 and received the Notice of Provisional Acceptance from SapuraOMV Upstream in August 2024 • Successfully achieved first gas for Kasawari Gas Development Project in August 2024 for PETRONAS Carigali Sdn. Bhd. • Successful sailaway of wellhead platform (WHP) for Rosmari-Marjoram Gas Project in September 2024 to Sarawak Shell Berhad Marine • Completed projects within or ahead of the planned schedule • Completed 86 vessels, with 15 vessels delivered ahead of schedule Expand Business Portfolio Business Growth Heavy Engineering • Increased presence in the new energy sector • Strengthened presence in the new energy sector by securing a second offshore wind project to construct the OSS HVDC platform for Nederwiek 1, as part of TenneT’s 2GW Programme in the Netherlands Marine • Strengthened expertise in floater conversion projects • Secured contracts to convert: - Uzma Engineering Sdn. Bhd. (UESB)’s Mobile Offshore Drilling Unit (MODU) into a Water Injection Facility (WIF) - MISC’s LNGC, Puteri Delima Satu, into an FSU Operational Excellence Organisational Improvements • Addressed value leakage • Lowered costs through proactive measures in addressing value leakage • Embedded a quality-driven culture • Achieved a Generative Quality Culture Survey rating of 4.23, categorised as “Proactive” • Implemented 129 quality initiatives to drive continuous improvement Towards Decarbonisation Advancing Sustainability Goals • Enhanced efforts in decarbonisation initiatives • Achieved an 8.5% reduction in emissions intensity compared to the 2016 baseline Strategic Collaborations • Pursued partnership to drive decarbonisation efforts • Collaborated with HD Hyundai Marine Solutions to advance maritime decarbonisation solutions Awards and Recognitions FTSE4Good Bursa Malaysia Index National Corporate Governance & Sustainability Awards (NACGSA) 2024 • Industry Excellence Award (Energy) • Malaysia’s Top 25 Overall Excellence Award • Remained a constituent of FTSE4Good Bursa Malaysia Index Malaysian Society for Occupational Safety and Health (MSOSH) Marine & Heavy Engineering Milestones Operational Excellence • SK408W Jerun Development Project: Delivered with near zero carry-over work, achieving first gas seamlessly • Kasawari Gas Development Project: Successfully achieved first gas, efficiently meeting all project milestones • Rosmari-Marjoram Gas Project: Completed the sailaway, with zero carry-over work, underscoring our commitment to operational excellence NAVIGATING THE CHALLENGES IN 2024 Challenges Mitigation Action Results Financial Performance • Standardised project execution methodologies tailored to specific archetypes • Implemented strategies to optimise cost • Returned to a net profit position • Optimised resource allocation Project Delivery • Deployed real-time asset monitoring and control systems for improved reliability • Standardised bid pricing strategies to enhance competitiveness • Integrated construction-led engineering to align with project delivery goals • Optimised procurement processes and engaged reliable subcontractors with strong performance oversight • Transitioned from project-centric approaches to an integrated, MHB-centric production framework • Key projects were successfully delivered, demonstrating strong execution capabilities, including: - Kasawari Gas Development Project - SK408W Jerun Development Project - Rosmari-Majoram Gas Project HSSE Excellence • Built quality into processes with a generative quality culture • Promoted a collaborative “MHB-first” mindset, to enhance team synergy • Strengthened safety fundamentals and fostered a culture of excellence, emphasising proactive risk management • Achieved zero fatalities and zero LTI while maintaining low Total Recordable Cases (TRC), reinforcing operational integrity and workplace safety • MHB was recognised with Gold Class 1 Award Malaysian Rating Corporation Berhad (MARC) • Affirmed positive AA-IS rating to MHB MOVING FORWARD Decarbonisation • Lower emissions intensity by implementing emissions reduction initiatives and a responsible supply chain programme Resilient Core • Develop a strong foundation in achieving project delivery excellence • Build a high-quality order book through securing strategic contracts • Maintain a balanced portfolio by enhancing core competencies and developing robust capabilities in new energy projects • Fortify services and assets in preparation towards achieving premium yard status Profitable New Energy Business • Secure projects in offshore wind, CCS and modular hydrogen production through strategic partnerships, alongside maritime decarbonisation retrofits KEY ACHIEVEMENTS Key Financial Highlights Revenue (RM million) Dry Dock Utilisation 2023 65% 2024 74% 2024 2023 3,309.2 3,608.6 Business Highlights Operating Profit/(Loss) (RM million) 2024 2023 (467.7) 141.0
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