Integrated Annual Report 2021

CHAIRMAN’S MESSAGE KEY MESSAGES I am happy to share that MISC has been able to effectively manage both the shorter-term challenges of the pandemic to ensure its business continuity and stability, whilst at the same time focusing on the longer-term trends influencing the Group’s business environment, to redefine the Group’s direction as the world evolves towards a decarbonised future. MISC Berhad 24 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 25 DEAR VALUED SHAREHOLDERS On behalf of the Board of Directors (Board), it is my honour to present to you the Integrated Annual Report and Audited Financial Statements of MISC Berhad and its subsidiaries for the financial year ended 31 December 2021 (FY2021). Marking my first full year as the Chairman, I have had the privilege of working closely with my colleagues on the Board to uphold our stewardship of MISC’s value creation journey as we pursue our aspiration of moving energy to build a better world. CHALLENGING OPERATING ENVIRONMENT 2021 has been shaped by the challenges of going through a second year of the COVID-19 pandemic. Concerted national vaccination drives formed the main thrust of attempts to bring about an end to the pandemic. However, new virus variants caused further waves of infections which led to cycles of relaxation and reimposition of restrictions. Continued mobility restrictions and supply chain disruptions constrained oil demand as well as global industrial activities. There was heightened global attention on climate change and a focus on the decarbonisation agenda. Rising expectations on this front made it imperative for organisations to rethink their future role in a net-zero economy. I am happy to share that MISC has been able to effectively manage both the shorter-term challenges of the pandemic to ensure its business continuity and stability, whilst at the same time focusing on the longer-term trends influencing the Group’s business environment, to redefine the Group’s direction as the world evolves towards a decarbonised future. OUR FINANCIAL PERFORMANCE Despite facing another challenging year, MISC’s financial performance and financial position have remained strong. The Group’s strategy of focusing on long-term time charters has largely insulated us from the market volatility. In 2021, MISC’s revenue increased by 13.5% to RM10,671.7 million. The Group recorded a profit before tax of RM1,774.6 million in 2021 compared to a loss before tax of RM123.6 million in 2020, as 2020’s results included a one-off impact due to the unfavourable decision in relation to the GumusutKakap Semi-Floating Production System (L) Limited (GKL) arbitration. The Group’s financial position remained robust, with low gearing ratios and stable credit ratings. Our cash balance remains healthy at RM7,952.3 million, supported by the recurring cash flow generated from the Group’s portfolio of long-term contracts. CREATING VALUE FOR SHAREHOLDERS AND STAKEHOLDERS For FY2021, the Board has declared a total dividend of 33.0 sen per share, maintaining a consistent level of dividend payout for the third year running. This is in accordance with our commitment to provide sustainable dividends to our shareholders. Despite the evolving challenges impacting the industry landscape, we continued to uphold the high standards of operational excellence in our services to our customers. The Group also stepped up on initiatives throughout its value chain of business partners and suppliers to ensure they practise the same high standards of integrity and ethics as MISC. As part of continuing efforts to safeguard the safety, health and well-being of our workforce, we implemented the COVID-19 Vaccination Programme to facilitate the vaccination of employees and their dependents. By the end of 2021, 99% of onshore employees and 90% of seafarers were fully vaccinated. The Group has maintained its social stewardship by continuing the ALAM Cadet Sponsorship programme, whereby more than RM21.71 million has been spent towards providing maritime education and training for youths to ensure a sustainable talent pipeline for the maritime industry. Our ongoing Heart of the Ocean Programme includes the Mersing Islands Reef Conservation Initiative and the UMT-MMS Sea Turtle Conservation Initiative. This programme, implemented under the Biodiversity Conservation initiative of the MISC Sustainability Strategy, includes capacity building to improve sustainable tourism and elevate the socio-economic status of local communities. As a responsible corporate citizen, the Group has contributed RM268,750 through the MISC Disaster Fund to help with disaster recovery efforts in the wake of the disastrous floods that affected Malaysians in December 2021 as well as our continued support towards those affected by the pandemic. DATUK ABU HURAIRA ABU YAZID CHAIRMAN

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