MISC BERHAD INTEGRATED ANNUAL REPORT 2025 08 11 09 05 12 SEC 06 STRATEGIC REVIEW 10 07 13 01 02 03 04 76 www.miscgroup.com 77 www.miscgroup.com #deliveringProgress OUR RISKS AND MITIGATION STRATEGIES OUR RISKS AND MITIGATION STRATEGIES IMPACT MITIGATION STRATEGIES OPPORTUNITIES The energy transition enables portfolio diversification and long-term positioning through targeted investments in low-carbon assets and value chains. By pacing investments and selectively engaging in new energy solutions like alternative fuels and liquefied carbon dioxide (LCO₂) transport, the Group can avoid stranded capital, access new revenue streams, and remain competitive amid global decarbonisation uncertainty Pursue future low-carbon solutions while reducing the carbon footprint of existing operations through: • Selective monetisation of assets and investments into dual-fuel conventional vessels and pivot to new energy • Strategic collaborations to pursue opportunities across emerging new energy sectors with a focus on hydrogen (H₂) and carbon capture and storage (CCS) value chains • Implementation of decarbonisation initiatives across the existing fleet and operations • Targeted development programmes to strengthen internal capabilities and skilled workforce to adequately support and execute the Group’s MISC 2030 Ambition • Reduced asset competitiveness due to escalating challenges in meeting stakeholders’ environmental expectations and regulatory requirements • Risk of asset obsolescence and increased capital expenditure for fleet renewal and technology upgrades • Exposure to fines, penalties and legal actions arising from non-compliance with regulatory requirements • Uncertainty in achieving targeted cash flows from new energy investments as markets and technologies continue to evolve ENERGY TRANSITION AND DECARBONISATION RISK R3 Evolving decarbonisation regulations, market expectations, infrastructure readiness and technology maturity may affect the Group’s ability to transition its portfolio and operations in line with energy transition pathways, potentially impacting asset competitiveness and long term value RISK TREND Regulatory fragmentation continues to shape the upward trajectory of the risks surrounding the pace and direction of global decarbonisation efforts. Delays and fragmentation in regulatory implementation continues to influence investment and technology decisions across the shipping and energy sectors affecting the Group’s long term decarbonisation ambitions Material Matters: M1 M9 M2 M3 M4 M6 M11 M12 Key Capitals: E4 E6 E8 E3 E5 E7 Operating Environment: Strategic Pillars: SP1 SP2 SP3 Strong financial discipline and balance sheet resilience enable the Group to sustain investment capacity and market confidence across financial cycles. By managing liquidity and applying disciplined investment criteria, the Group preserve access to funding and capital deployment capacity even during periods of market dislocation, supporting long term value creation • Inability to maintain optimal gearing levels to meet financial return targets • Reduced capacity to invest in fleet renewal, new energy initiatives and support growth targets under the MISC 2030 Ambition • Higher financing costs that affects project returns • Potential pressure on the Group’s credit rating and investor confidence, affecting access to capital and unfavourable funding terms • Implement phased interest rate hedging strategies to mitigate exposure to interest rate volatility • Maintain a robust liquidity position through disciplined working capital practices and a structured management of credit facilities • Undertake selective capital investments aligned with strategic priorities and financial discipline • Secure long-term charters for capital intensive assets to strengthen earnings visibility and support financing capacity Global financial market volatility, interest rate uncertainty and tighter credit conditions continue to influence funding availability and cost of capital. The Group maintains a prudent financial posture around balance sheet management, investment funding and capital allocation decisions to manage financial impact RISK TREND FINANCIAL RISK R4 Volatile financial market conditions, funding availability and cost of capital dynamics may affect the Group’s ability to maintain optimal capital structure, fund strategic investments and sustain financial resilience Key Capitals: E3 E5 E2 E4 E7 E8 Operating Environment: SP3 SP1 SP2 Strategic Pillars: Material Matter:
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