MISC Integrated Annual Report 2020

KEY DEVELOPMENTS OCIMF is widely recognised as the voice of the oil industry providing expertise in the safe and environmentally responsible transport and handling of hydrocarbons in ships and terminals and setting standards for continuous improvement. A significant milestone recorded during the year was OCIMF acknowledging and granting us membership under MMS in January 2020. The membership registration was backdated to January 2018 to reflect our rebranding in 2017 to MMS (formerly PETRONAS Maritime Services Sdn. Bhd.) after we became part of MISC Group. Prior to becoming part of the Group, the OCIMF membership for PETRONAS’ marine assurance and compliance was registered under PETRONAS Sungai Udang Port Sdn. Bhd. (SUPSB), a wholly owned subsidiary of MMS when MMS was an indirect wholly owned subsidiary of PETRONAS. The event in January 2020 represents a significant achievement for us as it provides independent validation to our clients of MMS’ adoption of best practices in how we deal with the transportation of crude oil, oil products, petrochemical and gas in the global marine industry that we are in. Despite the challenging operating environment, MMS was able continue to expand our business during the year. We began providing pilotage services to PETRONAS’ PFLNG DUA located offshore Sabah. In response to the pandemic limiting our ability to conduct physical inspections in international waters, we transitioned physical inspections required under Offshore Vessel Inspection Database (OVID) and the Ship Inspection Report (SIRE) to remote inspections when necessary. In September 2020, we were able to perform three OVID inspections in Turkmenistan, UAE and Trinidad and Tobago. We also conducted pre-hire inspections for three anchor handling tug supply (AHTS) and one fast crew boat (FCB) in Trinidad and Tobago. Other inspections we performed MOVING FORWARD We foresee that recovery from the COVID-19 crisis will take place over the coming year. While the pace of recovery is expected to be moderated by the efficacy of vaccine roll outs throughout the world, the oil and gas sector is already beginning to show some positive trends in terms of growth. As at December 2020, Brent crude oil prices have rebounded to reach the USD50 per barrel mark. Sustainability Pillar Initiatives and outcomes Customers In 2020, MMS conducted a customers survey for our key customers. The aim was to gauge our customers’ perception of the Group and to identify areas of improvement to better serve them. MMS scored well within the ‘Meeting Expectation’ category, with more than 80% of respondents indicating that they were satisfied with services provided. Assets/Fleet Services and Technical and/or Engineering Capabilities and Innovation scored well. Based on the findings, an action plan with respect to the identified gaps and areas of recommendation has been developed. Governance & Business Ethics In 2020, MMS actively participated in the “See. Speak. Support.” programme. We also took part in the annual compliance refresher via an e-learning platform, and participated in the annual Compliance Culture Survey. Employees In 2020, although the COVID-19 pandemic had led to high unemployment rates nationwide, MMS hired new employees. A total of 13% of our total workforce are new hires. Our gender percentage stands at 20% female and 80% male. We spent approximately RM0.35 million on the training and development of our employees, with an average 25 training hours per employee. HSSE remained our top-most priority, and we maintained safe operations with zero LTI and TRCF. Our excellent HSSE track record led to MMS being awarded the MSOSH OSH ‘Gold Class II Award’ for good occupational safety and health performance at the Sungai Udang Port, denoting our strong commitment to safety when operating our ports. We developed a volunteer programme to enable our employees to participate in environmental conservation utilising a hands on approach. By visiting the programme site, and getting involved in the day-to-day conservation activities, our employees will have a deeper appreciation of the importance of environmental conservation. In turn, this will instil a greater sense of responsibility towards ensuring the sustainability of marine and other ecological life, which they can act upon in their jobs as well as in their personal lives. We plan to roll out this element of the programme in 2021 once the pandemic is under control and movement restrictions have eased. PORT MANAGEMENT & MARITIME SERVICES included riverine vessel inspection on behalf of PETRONAS for vessels travelling upriver through the forests of Sarawak to transport fuel into remote rural areas. The vessels used for these journeys need to be small enough to access rivers as they get narrower upstream. At the same time, these vessels need to meet the necessary safety requirements to ensure that the cargo is transported safely. We also carried out shipyard assessments at 11 Malaysian shipyards identified by PETRONAS as part of their future newbuild offshore support vessel (OSV) project. We also put in the groundwork to explore owning our own tugboats to support our port and terminal operations. Having ownership of the tugboats would minimise risks associated with relying on third party providers. Among the benefits are improvements in the uptime of the assets that assist our operations, and in the longer term, the optimisation of operational costs. HSSE has always been our utmost priority, and we have maintained our Lost Time Injury (LTI) at zero since 1999. Our consistently high safety levels have inspired our clients’ trust in the quality and reliability of our service delivery. During the year, MMS demonstrated its ability and commitment to continuously improve its services with the award of the ISO 9001:2015 certification, the internationally recognised standard for quality management systems from SIRIM. SUSTAINABILITY Sustainability Pillar Initiatives and outcomes Environment We are deeply committed to protecting the marine environment, and have established a five-year MMS Marine Biodiversity Conservation Programme in line with this. The programme’s aim is to protect and conserve sea turtles through a strategic collaboration with Universiti Malaysia Terengganu – Sea Turtle Research Unit (UMT-SEATRU). We aspire to further promote the UMT-SEATRU as a sustainable centre of excellence (COE) both locally and globally. Housed at Pasir Chagar Hutang on Pulau Redang, the programme consists of three modules namely, the facility upgrading programme, outreach programme and the volunteer programme. MMS offices has also been certified as Green Seal Green Office Partnership. It is a certification that implement standards on office sustainability, focuses only on those areas within the direct control of office managers which include waste management, employees education, office and pantry supplies, IT equipment management, transportation and office operations. In line with recovering oil prices, we expect production liftings from existing clients to gradually stabilise to pre- COVID-19 levels by the end of 2021. Although we expect our business to improve on the back of this, we are mindful that oil price volatilities remain a risk. Therefore, our strategic priority is to strengthen our business fundamentals in order to become more competitive to support of MISC’s growth agenda. We have identified several key areas of focus to drive our business growth in the year ahead. We will enhance our employees capability and capacity to ensure high quality service delivery to our clients, and sustain our income stream through operational excellence. To create growth, we will seek out new business with our existing major client and parent company, PETRONAS, whilst concurrently exploring opportunities to bring on board external clients such as provision of engineering maintenance services for SPM to potential clients. This approach, along with our intention to pursue new business models that will deliver our long-term business sustainability, will enable us to accelerate our regional and international footprint. Another key area of focus for the year ahead is to expand our digitalisation efforts. The thrust of our digital innovation efforts is focused on improving key processes for better cost optimisation and service efficiency in our port operations and maintenance and marine assurance. In 2020, we kick started our plan to establish our own in-house marine engineering and maintenance services to strengthen our competitive position as a maintenance service provider. We plan to continue with our efforts in the year ahead and drive our business growth both within Malaysia and the region. Concurrently, we will be exploring options to acquire new assets that will help us grow our revenue base. While we are mindful of challenges that may persist in the year ahead, we remain open to any opportunity to grow our business, including potential entry into new markets. In line with our commitment to create value through our sustainability initiatives, we recorded the following outcomes during the year: ///// Sustainability / Financial Review / Business Review / Leadership / Governance /// MISC Berhad / Integrated Annual Report 2020 7 182 MISC Berhad / Integrated Annual Report 2020 7 183 /// Governance / Leadership / Business Review / Financial Review / Sustainability ///// Section Section

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