MISC Integrated Annual Report 2020

// Key Messages / Highlights / Strategic Review / Sustainability / Financial Review ////// MISC Berhad / Integrated Annual Report 2020 4 60 MISC Berhad / Integrated Annual Report 2020 4 61 ////// Financial Review / Sustainability / Strategic Review / Highlights / Key Messages // Section Section LNG Asset Solutions and Petroleum & Product Shipping segment commission, acquire or in-charter LNG carriers and tankers Complete/full range offshore platform EPCIC services for offshore & onshore construction Comprehensive marine repair & refurbishment LNG Asset Solutions and Petroleum & Product Shipping segment transport energy resources for customers - LNG, crude and petroleum products Trained seafarers in Eaglestar manage and operate LNG and petroleum vessels Offshore Business operates offshore oating solutions Offshore Business provides comprehensive EPCIC solutions, from design to operations and decommissioning of offshore assets ALAM provides maritime education and training for seafarers MMS provides port management and maritime services The above are some of the key activities of the Group. For further details on the activities and key developments of the businesses, please refer to Who We Are and What We Do on pages 16 to 17 and Business Review section on pages 136 to 189. POSITIVE OUTPUTS In a year marked by global mobility restrictions, MISC stayed the course Energy resource transportation • Our LNG carriers transported 6% of the world's LNG which provides cleaner energy globally (2019: 7%) • Our petroleum and product tankers transported an estimated 110 million tonnes of crude, petroleum products and chemicals to global customers (2019: 125 million tonnes) • We took delivery of our first VLEC that transported the largest cargo of ethane in the history of ethane shipping to date • We also took delivery of the first dedicated LBV in Southeast Asia that supplies LNG to fuel ships operating in the region and delivers LNG directly to PETRONAS small-scale customers • Eaglestar continued to provide safe and reliable ship operations and successfully conducted crew change for 7,767 seafarers (2019: 12,823 crew changes) Offshore oil production and storage • Our floating assets processed approximately 26% and stored an estimated 29% of Malaysia's crude oil production (2019: processed and stored 26%) • FSO Golden Star was delivered to Vietnam and received its first condensate at the Sao Vang and Dai Nguyet (SVDN) project Heavy engineering and marine repairs • MHB’s Heavy Engineering segment completed two projects and sailed away one central processing platform and one mercury removal unit (2019: two projects and one sail away) • MHB’s Marine segment completed 64 vessel repair and maintenance jobs and secured 61 jobs including one FSO conversion (2019: 77 vessels and 86 jobs) • MHB completed Dry Dock 3 and received its first vessel for dry docking repairs Port management and maritime services • MMS provided pilotage and loading master services to ports and terminals in Terengganu, Melaka, Sabah and Sarawak and its accredited inspectors and engineers performed more than 7,000 vessels screenings, about 800 inspections, world-class marine operations, consultancy and assurance services (2019: about 5,000 vessels screening, more than 1,100 inspections) Seafarer education • ALAM enrolled 408 students for cadet and ratings programmes; 203 students graduated in 2020 (2019: enrolled 441 students for cadet and ratings programmes; 191 students graduated) • ALAM maintained 100% cadet employability for 2020 with 61 eligible candidates securing employment with shipping companies locally and regionally Asset expansion and rejuvenation • Took delivery of one VLEC, one LBV, six DPSTs and one FSO, and disposed five petroleum tankers • Entered into newbuilding of three DPSTs and two LNG dual-fuel VLCCs, acquisition of six newbuild VLECs and EPCIC of one FPSO Environmentally-friendly operations • Zero incident of major spills to the environment from all operations since 2013 • Delivered two LNG dual-fuel and four eco-friendly DPSTs for operations in international waters • Three assets were sent for green recycling in accordance to The Hong Kong International Convention for the Safe and Environmentally Sound Recycling of Ships, 2009 NEGATIVE OUTPUTS Business operations • Delays in vessel/asset deliveries and project progress due to suspension/disruption of activities as a result of the COVID-19 pandemic • Unfavourable arbitration award relating to Gumusut Kakap (GKL) semi-submersible floating production system Environment and safety • 4.04 million tonnes of GHG emissions (2019: 4.25 million tonnes) • 36,053 tonnes NOx and 3,240 tonnes SOx emissions into the atmosphere (2019: 46,720 tonnes NOx and 29,484 tonnes SOx) • 24,776 tonnes of hazardous and general waste from non-shipping created (2019: 30,792 tonnes) • 635,686 m 3 freshwater withdrawal consumption (for non-shipping activities) (2019: 740,542 m 3 ) • One fatality in our shipping operations (2019: zero fatality) HOW WE CREATE VALUE INPUTS KEY ACTIVITIES EXTERNAL ENVIRONMENT LONG-TERM TRENDS IDENTIFICATION AND ASSESSMENT OF RISKS AND OPPORTUNITIES, OUTLOOK, STAKEHOLDERS AND MATERIAL MATTERS OUTPUTS OUTCOMES Please refer to Outcomes on page 62 STRATEGY GOVERNANCE VISION AND MISSION PHYSICAL CAPITAL Our fleet comprises 29 LNG carriers, one VLEC, one LBV, 76 petroleum and product tankers, two floating storage units and 14 floating assets We also own marine and heavy engineering facilities, including fabrication yards and dry docks. Our maritime training facility that spans over 74 acres in Melaka is fully equipped with learning and training facilities, resource centre and a campus INTELLECTUAL CAPITAL Our intellectual capital includes specialist knowledge and experience in ship operation and management, ship-to-ship transfers, EPCIC and operations of floating production system, fabrication of complex heavy engineering structures, marine repairs, and operating the only modular capture vessels (MCV) in the world SOCIAL & RELATIONSHIP CAPITAL We have a positive brand reputation and we develop strategic partnerships and trusted relationships with our customers, suppliers, governments, regulators and industry bodies for long-term sustainability of our business HUMAN CAPITAL We have over 8,600 dedicated, high performing and specialised personnel at sea and shore which we leverage on to steer our business and operate our ships, floating assets and facilities efficiently and safely FINANCIAL CAPITAL Our sources of financial capital to run our business and fund our growth comprise internally generated funds and debt financing NATURAL CAPITAL Our operations rely on natural resources such as fuel, water and land