PRESIDENT/ GROUP CEO’S REVIEW KEY MESSAGES MISC Berhad 28 Integrated Annual Report 2021 MISC Berhad Integrated Annual Report 2021 29 DEAR VALUED SHAREHOLDERS 2021 - A FITNESS STRESS TEST “What does not break you makes you stronger.” I am sure these are familiar words most of us have heard before, words of motivation and encouragement when one is going through adversities and great tribulations in life. Perhaps these are the words that we have all heard often the past two years as the COVID-19 pandemic brought the world we knew to a screeching halt in 2020 and raged on in 2021 as new variants emerged. We faced many trials and tribulations brought about by the pandemic that are unprecedented. We lost our loved ones to the pandemic that took many lives. We suffered through isolation and separation from our families and friends, as our professions took us to different geographical locations away from home and were unable to visit each other due to strict border controls between countries and nations. In some locations, even inter-state border controls limited the movement within the same country. Many lived in fear and continued living in anxiety, afraid of the pandemic and the risk to our lives. Afraid of the side effects of vaccination. And many across the globe lost their jobs or were displaced from their normal course of employment as the pandemic shut down economic activities and altered day-to-day business dynamics. Companies, enterprises, and institutions, regardless of size, failed due to the harsh financial tests imposed by COVID-19. Track records were certainly no guarantee of one’s survival and continuity. Only the strong and resilient survive. How did we as the MISC Family do in 2021? Did we merely survive and get by? Or we more than survived? Did the harsh realities of COVID-19 in 2021 break us or make us stronger? Before I provide the self-assessment, let’s remind ourselves as to what we said about 2021 and what our priorities would be during the year. THE WORLD IN 2021 In last year’s Integrated Annual Report, I shared my expectations that there would likely be persisting headwinds that the global COVID-19 pandemic would bring our way in 2021. The war against the pandemic and the road to global economic recovery remained uncertain. True enough, 2021 was shaped by the pandemic continuing to trigger socio-economic challenges throughout the world. The global business community persevered in its efforts to maintain business continuity, bolstered by the hope promised by worldwide vaccination programmes. However, just when it seemed like we were turning the corner and looking to better times ahead, the situation got worse towards the later part of 2021 as new COVID-19 variants emerged, triggering a fresh wave of outbreaks. Global economic activities, striving to restart and to get back onto a path of recovery, grind to another screeching halt. Among the cascading adverse effects of the pandemic were global supply chain disruptions, which could be seen across all facets of life and business. The continuation of the pandemic hampered efforts to get the logistics value chain up and running smoothly again, leading to seemingly unending delays and higher costs that were felt by all. The mobility of human capital across international borders has not fully recovered even until now. This has affected business activities and economic recovery across all industries and regions. In the capital market, investors and bankers had trepidations on funding and lending to businesses as the uncertainties foreshadowed a murky future, although accommodative policies helped cushion the economic impacts for the time being. However, spiking global inflation, sparked primarily by a malfunctioning global supply chain has prematurely forced policymakers to turn hawkish, with expectations of inevitable interest rate hikes, the most common policy tools used to tame inflation. This is indeed a delicate balancing act for policymakers, on how to tame short-term circumstantially-induced inflation but at the same time, leave enough breathing space for global economic sectors to recover from the ill-effects of the pandemic. ENTERING 2021 WITH OUR EYES WIDE OPEN As we had entered the year with a very clear idea of what to expect should the pandemic continue into the year, there were very few surprise elements for us. We were able to leverage on our learnings from the year before and support our people at sea and shore with the utmost care and compassion. Consequently, we managed pandemic-related impacts much better in 2021. We made a huge and concerted effort to vaccinate all our people worldwide and I am very pleased with the high proportion of our people who are fully vaccinated. 2021 was the year that I had said MISC would take a breather in our aggressive growth agenda, after the rapid clip of securing new contracts in recent years. Instead, we would focus on ensuring the successful execution of our many ongoing projects. Hence, it was not a disappointment that we only secured one major contract in 2021, the time charter contract with Shell for three newbuild LNG dual-fuel VLCCs. Our decision to hit the pause button has helped us navigate the second year of the pandemic. Standing firm on our decision to focus on what was most important to us were not pulled in too many different directions. Our 2021 mantra of keeping things simple and sweet saw us prioritising project execution through execution excellence. The GAS Business segment delivered the remaining five out of our six VLECs into service, while the Offshore Business segment secured contract renewals on four floater assets, which will contribute to the Group’s secured and recurring income. We have continued to progress on the ongoing vessel newbuilding projects that are slated for delivery in 2022 and 2023, and of course, all hands on deck for the major Brazilian FPSO project, which is to be delivered in 2024. DATUK YEE YANG CHIEN PRESIDENT/GROUP CEO
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