Integrated Annual Report 2021

2021 has been another year when the global Eaglestar team of professionals both at sea and ashore have demonstrated their resilience and capability to maintain seamless ship operations, progress with newbuild projects and provide around the clock technical operational support to our clients. Our ability to ensure business continuity through the second year of the pandemic has strengthened our reputation as an integrated marine services provider. The crew crisis continued on the back of fresh waves of COVID-19 infections and lockdowns. At its peak, some 400,000 seafarers around the globe were affected by travel and quarantine restrictions, which impacted their mental wellbeing. Changing Standard Operating Procedures (SOPs), travel restrictions and border closures made it inevitably difficult to bring in service engineers, while supply chain disruptions led to problems in obtaining spare parts for in-service and drydocking repairs. In the face of an immensely challenging landscape, the Eaglestar team responded in an agile manner to overcome pandemic-related impacts as we continued to move customers’ cargo safely around the world. To help seafarers deal with their emotional stress, we developed and organised mental health, wellbeing and mindfulness interventions to support them through the crisis. Frequent engagements were conducted to boost crew morale and reinforce safety guidelines and SOPs. CAPTAIN PETER LIEW GUAN HOCK Managing Director/Chief Executive Officer, Eaglestar Marine Holdings (L) Pte. Ltd. We also embarked on a focused vaccination drive which resulted in 95% of our sea staff fully vaccinated as at the end of 2021. Comprehensive SOPs were outlined and implemented for crew changes, while in the Philippines, Malaysia and India, we successfully introduced “crewsafe” facilities for our people. COVID-19 crew relief engagements were also conducted in collaboration with shipowners and the authorities, complementing our own enhanced shore oversight to ensure safe and efficient operations. A significant step in 2021 was embarking on our transformation from the Principal (owner/operator) to the Agency (third party shipmanager) business model in line with ensuring sustainable business growth. We revamped and established processes and procedures aligned with third party ship management industry standards and practices that would enable us the options to provide marine services beyond MISC Group assets. Within the MISC value chain, Eaglestar continued to support the GAS and AET segments’ value creation endeavours in terms of driving new business growth and maintaining existing ship operations. Various initiatives were established to provide cost competitiveness for new business ventures and minimise operational cost impacts arising from the pandemic. Leveraging on our experience in providing LNG Carrier (LNGC) management services, Eaglestar reached out to shipowners to heighten our market visibility and effectively communicate our service portfolio to external clients. Despite being an industry newcomer, Eaglestar was invited to participate in various tenders to provide shipbuilding project management and ship management services, testament to our credible industry reputation. Cost optimisation was one of our key imperatives for the year, as we focused on engendering continuous improvement through benchmarking exercises. These addressed measures that would drive cost optimisation and operational efficiency by adopting industry best practices. We maintained our commitment to developing a sustainable talent pipeline, to gear up for manpower needs required for 13 newbuilds earmarked to be delivered in 2022 and 2023. Our initiatives were directed towards recruitment, crew training covering both classroom and practical onboard training, certifications and mental preparedness to build our people’s capabilities to man the vessels from the shipyard and sail away safely to commence charter for the owners. 2022 is showing signs of a positive outlook for global LNGCs with increasing growth in the global gas carrier fleet. With the shipping sector moving towards industry decarbonisation by 2050, more vessels are switching to alternative fuels and innovative Emission Saving Technologies (EST) to reduce carbon emissions and meet stringent emission regulations. Our focus for the year ahead is to execute our Five-Year Strategy within our three strategic priorities of sustainable business growth, operational excellence and cost optimisation, and building a dynamic workforce for a competitive edge. To ensure sustainable business growth, we plan to further enhance our cost competitiveness by benchmarking ship operating costs against industry standards to create value and attract new customers. We will continue to invest in new technology to increase ship management efficiency and optimise ship operating costs, and build our talent pool to support fleet growth and future manpower needs. Our growth agenda will be supported by our push to achieve operational excellence. Towards this end, we will review and restructure our business and fleet operations functions, and enhance processes and procedures to optimise outcomes. A prudent cost management strategy has been developed to achieve cost optimisation. Our highly skilled workforce forms the cornerstone of our success, and we are committed developing an agile, flexible and capable talent base to retain our competitive edge and differentiate ourselves from our competitors. Cognisant of shipping industry trends and manpower needs, we will elevate our training and development programmes to support our business growth agenda, and build our technical know-how on the application of new EST technologies and operating ships using alternative fuel. We are confident that our dedication and commitment to pursue our strategic objectives will set us on the right path to succeed in our bid to transform Eaglestar into a third party shipmanager. CAPTAIN PETER LIEW GUAN HOCK Managing Director/Chief Executive Officer, Eaglestar Marine Holdings (L) Pte. Ltd. MANAGING DIRECTOR/ CHIEF EXECUTIVE OFFICER’S REMARKS KEY DEVELOPMENTS Implemented Agency Model to become a third party shipmanager In 2021, a major milestone for Eaglestar was our successful transition to an Agencybased business model which has enabled us to become a “full-fledged” third party shipmanager. This move forms the first step towards the realisation of Eaglestar’s aspiration to grow our vessels under management by providing services to external customers beyond the MISC Group. Our transition journey began in 2019 when we developed a robust five-year business plan. Since then, we have executed resource planning initiatives and established our pricing mechanism with the end goal of our transformation in mind. Eaglestar’s shift in business model will be beneficial for the MISC Group as it will enable us to generate sustainable profit from both internal and external customers to fund the following aspects of our business: • Operating expenses covering both direct and indirect overhead cost • Investments in technology to increase ship management efficiency and optimise ship operating cost • Maintain a dynamic and skilled maritime talent pipeline to support the Group’s business growth and provide service security and quality to its Maritime assets In addition, it will also drive cost competitiveness in our service provision, where we will be able to provide market benchmarked rates to create value and attract customers. INTEGRATED MARINE SERVICES BUSINESS REVIEW Embarked on Transformation to Become a “FullFledged” Third Party Shipmanager MISC Berhad 154 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 155