INTEGRATED MARINE SERVICES BUSINESS REVIEW MOVING FORWARD As we move into 2022, the positive outlook for global LNGCs will remain. Predictions are for exponential growth in the short term, and steady growth in the medium-term, before stagnating in the longer term as a result of energy transition. These healthy fundamentals will be the catalyst for Eaglestar as we leverage on our operational capabilities for gas carriers to potentially secure third party business in line with our transformation to the Agency Model of business. Energy transition and climate change are driving the shipping industry’s move to reduce emissions. In the short term, this is resulting in more demand for LNG fuelled vessels, which augurs well for Eaglestar to secure new external business by leveraging on our construction supervision and technical management capabilities of LNGCs, as well as LNG Bunkering Vessels. One of our focus areas for the short-term future is to drive our business growth by increasing external vessels under our management by targeting potential clients in the Asia region to answer increasing demand for LNGC, in addition to other markets such as Petroleum, Dry Bulk and Containers. As the maritime sector transitions towards industry decarbonisation by 2050, there is greater demand for alternative fuels which will result in the maritime propulsion fuel mix changing radically. Conventional fossil fuel-based propulsion vessels will be eventually phased out and replaced with new propulsion which meets the new low carbon emission requirements. In order to manage the change in future fuel mix, Eaglestar will focus on building our capability to manage and operate ships with alternative fuel technology. In order to meet more stringent carbon emission regulations, more vessels are incorporating innovative Emission Saving Technologies (ESTs). In line with this, Eaglestar has embarked on acquiring knowledge on the operability of emerging ESTs and build our technical know-how on the management and operation of technologically advanced vessels. As we continue with our transformation to a third party shipmanager, we will maintain our focus on developing the right capabilities, mindset, process and procedures, as well as platforms to embrace the transition into an Agency Model. In order to offer a competitive proposition for our potential clients, we will align our pricing model and business operation philosophies with industry practices. A key way in which we will be able to extract value is to increase our operational efficiency to deliver cost optimisation. In line with this, we plan to restructure our ship operations and maintenance functions, especially in the area of dry-docking to optimise cost and increase effectiveness. To enhance our processes, we plan to review and standardise the ship maintenance strategy across the fleet to generate value and increase visibility on maintenance costs. Our approach to prudently manage costs will see us striving to maintain cost per employee to ship at the industry level. We seek to generate further revenue by providing technical advisory services which will drive higher utilisation of manhours of our personnel. As a member of the MISC Group, we will continue to support other companies within the Group by providing them project management and technical services to support their own growth journey. MISC Berhad 158 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 159
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