FINANCIAL REVIEW REVENUE For the financial year ended 31 December 2021 (FY2021), Group revenue of RM10,671.7 million was 13.5% higher than the financial year ended 31 December 2020 (FY2020) revenue of RM9,401.2 million. The increase in revenue was mainly contributed by higher construction revenue following higher progress from conversion of a Floating, Production, Storage and Offloading (FPSO) unit in the Offshore Business segment and deliveries of five Very Large Ethane Carriers (VLEC) in 2021 from the Gas Assets & Solutions segment. DIVIDENDS In respect of FY2021, the Board had approved and declared on quarterly basis a total tax exempt dividend of 33.0 sen per share or RM1,473.0 million which was consistent to the total dividend declared and paid in respect of FY2020. The dividends were declared in line with the commitment to provide sustainable distribution to the shareholders. FY2021 Group revenue of RM10,671.7 million was 13.5% higher than FY2020 FY2021 Group operating profit of RM1,948.3 million was 3.4% lower than FY2020 FY2021 Group total assets of RM57,521.5 million was 11.0% higher than FY2020 FY2021 Group total liabilities of RM22,596.5 million was 21.0% higher than FY2020 FY2021 Equity attributable to equity holders of RM34,162.7 million was 5.9% higher than FY2020 FY2021 Gross debt-to-equity ratio of 0.49 was higher than FY2020 The Group’s approved and contracted committed capital expenditure at the end of FY2021 stood at RM3,416.8 million FY2021 41.0 sen earning per share as opposed to loss per share of 1.0 sen in FY2020 FY2021 Total tax exempt dividend of 33.0 sen per share FY2021 Group reported profit before tax of RM1,774.6 million compared to loss before tax of RM123.6 million in FY2020 +13.5% -3.4% 2020 2021 CASH FLOW The Group’s cash flows generated from operating activities for FY2021 of RM2,908.6 million included payments for the costs relating to the turnkey activities for conversion of a vessel to an FPSO facility amounting to RM1,126.1 million. Excluding the said payments, the Group generated an operating cash flow of RM4,034.7 million in FY2021, which is lower by 27.8% compared to RM5,587.9 million operating cash flow recorded in FY2020. The decrease was mainly due to a one-off charter prepayment received from a customer in the Petroleum & Product Shipping segment in FY2020 and the lower operating cash flow in the Offshore Business and the Petroleum & Product Shipping segments in the current year. However, the Group’s cash balance remains healthy at RM7,952.3 million, supported by the steady cash flow generated from the Gas Assets & Solutions segment’s portfolio of long-term contracts. TOTAL ASSETS Group total assets as at 31 December 2021 of RM57,521.5 million was 11.0% higher than total assets as at 31 December 2020 of RM51,821.0 million. The increase in Group’s total assets were mainly due to the recognition of contract assets relating to conversion of an FPSO, finance lease receivables following VLEC deliveries and capital expenditure (CAPEX) incurred during the year. TOTAL LIABILITIES Group total liabilities of RM22,596.5 million as at 31 December 2021 was 21.0% higher than total liabilities as at 31 December 2020 of RM18,669.9 million mainly due to the drawdown of interestbearing loans and borrowings in the current year to fund the Group’s CAPEX and growth projects. EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE CORPORATION Despite paying a total dividend of RM1,473.0 million in FY2021, the equity attributable to equity holders of the Corporation of RM34,162.7 million as at 31 December 2021 was 5.9% higher than the equity attributable to equity holders of the Corporation as at 31 December 2020 of RM32,272.8 million due to net profit recognised for FY2021 and gain on currency translation as Malaysia Ringgit (RM) weakened against the United States Dollar (USD) during the year. GROSS DEBT/ EQUITY RATIO The Group’s gross debt-to-equity ratio of 0.49 as at 31 December 2021 was higher compared to the gross debt-toequity ratio of 0.41 as at 31 December 2020 following the increase in total interest-bearing loans and borrowings during the year as explained above. CAPITAL EXPENDITURE REQUIREMENTS The Group’s approved and contracted committed capital expenditure as at the end of FY2021 stood at RM3,416.8 million. This excluded the amount committed for the conversion of a vessel to an FPSO facility of RM3,799.1 million as at 31 December 2021 as explained in Note 34 of the Financial Statements. Based on our strong cash position as at the end of FY2021 and secured financing facilities, the Group should be able to fund the committed CAPEX and pursue growth prospects. FY2021 Cash flows generated from operating activities excluding payment for turnkey activities of RM4,034.7 million was 27.8% lower than FY2020 OPERATING PROFIT Group operating profit of RM1,948.3 million was 3.4% lower than FY2020 operating profit of RM2,017.2 million. The decrease was mainly due to lower margin on freight rates and lower earning days from vessel disposals and redeliveries in the Petroleum & Product Shipping segment and additional cost provision recognised for on-going projects in the Marine & Heavy Engineering segment. PROFIT BEFORE TAX Group reported profit before tax of RM1,774.6 million compared to loss before tax of RM123.6 million in FY2020. The prior year loss was mainly due to the recognition of provision for litigation claims amounting to RM1,049.2 million, as well as a write-off of trade receivables and loss on re-measurement of finance lease receivables of RM846.2 million following the adverse decision on arbitration proceedings by Gumusut-Kakap Semi-Floating Production System (L) Limited (GKL) against Sabah Shell Petroleum Company Limited (SSPC). Excluding the arbitration impact, the Group would have recorded profit before tax of RM1,771.8 million in FY2020. EARNINGS PER SHARE (SEN) Profit attributable to the equity holders of the Corporation amounting to RM1,831.3 million translates to earnings per share of 41.0 sen in FY2021 as opposed to loss per share of 1.0 sen in FY2020. GROUP FINANCIAL REVIEW HIGHLIGHTS OF FINANCIAL PERFORMANCE FINANCIAL POSITION MISC Berhad 110 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 111
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