MISC Integrated Annual Report 2020

INTEGRATED MARINE SERVICES MANAGING DIRECTOR/ CEO’S REMARKS CAPTAIN RAJA SAGER Managing Director/CEO, Eaglestar Marine Holdings (L) Pte. Ltd. As an integrated marine services provider, Eaglestar maintained solid progress with our efforts to create value for our stakeholders, and ensured seamless business and operational continuity throughout 2020, regardless of the multiple challenges that we faced as a result of the COVID-19 pandemic. The pandemic severely disrupted supply chains worldwide, and shipping and ports turned into the global economy’s primary doorway. In these difficult times, seafarers became key employees facilitating the trade and transportation of energy, and Eaglestar continued recording strong performance through the efforts of our high performing employees. Our sea, shore and newbuilding site teams rose to the challenge to demonstrate strong resilience in shifting their work strategies to the new normal. Our people were agile and adaptive in managing operational challenges, and responded swiftly to implement creative and innovative solutions. Throughout 2020, the Eaglestar team ensured that all our integrated marine services were conducted in full compliance with the stringent global health and safety-focused standard operating procedures (SOPs) that were imposed by governments throughout the world. We successfully delivered services while minimising any disruptions that arose from COVID-19 in the spirit of keeping our operations within the norms of ‘business as usual’. The dedication and commitment of our workforce have been the cornerstone of our sustained growth strategy, throughout all these years. As our people form our most valuable asset, ensuring the safety and wellbeing of our maritime professionals at sea and shore is our topmost priority. Our consistent ongoing engagements and communications with our people have been key in ensuring clear alignment towards Eaglestar’s successful achievements of our business goals and aspirations. During the year, we sought to keep our employees safe, motivated and their morale high, in line with our commitment to inculcate a high- performance culture. Our human capital management approach has been a critical factor driving our ability to achieve our aspiration to become the preferred integrated marine service provider. Eaglestar remains an integral and strategic enabler of MISC, as we support the Group in terms of the supply of human capital and technical services. Our company’s role spans the overall life cycle of each vessel, from shipbuilding, operational and maintenance, to the end-of-life ship scrapping. Based on our collective experience of over half a century, Eaglestar continues to provide shipmanagement related solutions in managing the fleet through all seasons and weather conditions, even through the current global pandemic. In 2020, a total of six newbuilds were delivered under the supervision of Eaglestar’s experienced and multi skilled project management team. Moving forward, there are more vessels in the pipeline comprising of DPSTs, LNG dual- fuel very large crude carriers (VLCCs) and full-scale LNGCs. A key milestone during the year was our appointment to provide shipmanagement services for Southeast Asia’s first LBV, the Avenir Advantage , making us one of the first ship operators with such highly sought-after industry capabilities. Sensitive to the fact that our clients were also encountering their own financial difficulties, we created customer value by working closely with them to effectively manage costs despite increased ship operating costs. This approach is in line with our partnership model of business where we view ourselves as partners to shipowners and strive for the optimisation of operational expenditure. As a result of our focused approach over the past year in expanding the types of vessels that we delivered, as well as catering to our customers’ needs, we have augmented our business resilience and capabilities towards achieving our short, medium and long-term value creation aspirations. Our unwavering focus has enabled us to maintain our high overall vessel availability rate at above 99%. While we have always focused our efforts towards maintaining a good track record in health, safety, security and environment (HSSE), in 2020 we recorded a regrettable fatality as a result of an unfortunate mooring accident which has deeply saddened us. We have extended our support to our employee’s family by providing them the assistance that they required to help them cope with their loss. To internalise the accident, the MISC Family had a HSSE Stand Down on 23 September 2020 across all our worldwide operations. In order to identify the incident’s root case, a thorough investigation was conducted and all recommendations made have since been instituted to ensure that such an incident is never repeated. Eaglestar’s longer-term objective is to expand our client base beyond the Group and provide integrated marine services to ship owners from the global energy transportation sector. We plan to further build up our stellar track record in the integrated marine services sector, and increase the scale and types of vessels in our management portfolio. Based on the Group’s shipmanagement projects that we have undertaken for AET and LNG Business segment, we are keenly aware of the requirements and expectations of international energy companies and our experience to date in the shipmanagement sector has strengthened our credibility and presence in the industry. This will provide the platform for us to secure new business beyond the Group, and we hope to leverage on the economies of scale obtained to provide cost advantageous integrated marine services to all our clients, combining the knowledge and solutions of both internal and external operations. A key focus area for the year ahead is embarking on the MISC Sustainability Strategy 2021–2025. We plan to accelerate the decarbonisation of our business by increasing energy efficiencies on vessels through the adoption of technological innovation. We have identified a number of areas that we will focus on which is shared in more detail in the Sustainability section of this Business Review on pages 175 to 176. The industry has demonstrated a clear shift towards greater demand for LNGCs and LNG propelled dual-fuel carriers, as ship owners and operators seek to utilise LNG as a transition fuel towards industry decarbonisation. This is in line with the International Maritime Organisation’s (IMO) initial aspiration to reduce total greenhouse gas (GHG) emissions by 50% by 2050, as well as the IMO 2020 sulphur cap regulation which came into force on 1 January 2020. Based on our unparalleled track record and experience in operating LNG-fuelled vessels, Eaglestar is well-positioned to provide skilled crews who have experience in green shipping in line with future growth trends. With our sights firmly set on these strategic priorities, we remain committed to continue building a dynamic workforce fully capable of responding to ever shifting market trends and a challenging operating environment. CAPTAIN RAJA SAGER Managing Director/CEO, Eaglestar Marine Holdings (L) Pte. Ltd. ///// Sustainability / Financial Review / Business Review / Leadership / Governance /// MISC Berhad / Integrated Annual Report 2020 7 172 MISC Berhad / Integrated Annual Report 2020 7 173 /// Governance / Leadership / Business Review / Financial Review / Sustainability ///// Section Section