• Since 2020, AET has sponsored 15 scholarships • In 2022: - Sponsored 2 more students through the AET-MaritimeOne scholarship for their studies at Singapore Maritime Academy - Singapore Polytechnic - Sponsored 10 students with scholarships in partnership with Texas A&M Foundation at the Texas A&M University, Galveston MOVING FORWARD PETROLEUM & PRODUCT SHIPPING AWARDS AND RECOGNITION COMMITTED TO MAKING A POSITIVE IMPACT IN COMMUNITIES In late 2022, with our growing presence in Latin America, AET relocated to a bigger office in Rio de Janeiro. The new location allows AET, Eaglestar and other MISC Group entities in Brazil to engage with our customers and key stakeholders from one location supporting the industry’s growth in Latin America while collaborating to further accelerate maritime sustainability. AET continues to garner various international industry and sustainability awards, testament of our operational excellence and contributions towards maritime decarbonisation. Among the industry awards obtained in 2022 were the Tanker of the Year Award at the Tanker Shipping & Trade (TS&T) Conference, Awards & Exhibition 2022 held in Athens, Greece for our first LNG dual-fuel VLCC Eagle Valence. The 2022-built vessel is on long-term charter to TotalEnergies. The award was open to tankers delivered since November 2021 and engage in bulk liquid transport that sets new benchmarks in one, more, or all the following areas - design, environmental, operational, safety, and technical performance. Eagle Valence has been recognised for setting a new bar for vessels of its kind – it can run on LNG, powered by a WIN GD 7×82 dualfuel engine. The vessel exceeds the EEDI Phase 2 reference line by more than 20% and supports AET’s goals of a 40% reduction in annual efficiency ratio GHG intensity by 2030 and net-zero GHG emissions by 2050. On top of that, Eagle Valence was also certified as a Green Ship as part of the MPA Green Ship Programme (GSP) at the Singapore Registry of Ships (SRS) Forum. The GSP recognises ship owners for their efforts in reducing the environmental impact of their fleet. A total of 43 ships from AET were awarded by the CSA with Environmental Achievement Awards, reflecting industry recognition of our stringent HSSE and environmental protection measures. Our excellent health and safety standards were recognised by the CSA when it awarded AET the Jones F. Devlin Award for Safety in recognition of our outstanding health and safety records for a combined 48 ships in 2022. Demand is projected to continue firming for the crude tanker segment, with tonne-mile trade estimated to grow by a healthy 5.3% in 2023 and 4.7% in 2024, faster than seaborne crude trade growth of 1.5% and 3.2% respectively. Trade flows are expected to continue to shift towards longer routes, owing to the rerouting of Russian cargoes and strong export growth from typically longer-haul suppliers such as the US and Brazil. Additionally, 2024 could see the return of some OPEC+ volumes, and increased imports into Asia on the back of refinery start-ups in China and India. On the supply side, the tanker orderbook is now equivalent to a record low of 4% of fleet capacity, with fleet growth expected to be minimal in the coming years. In addition, new environmental regulations that came into force in early 2023 are likely to encourage slower vessel speeds and increased EST retrofitting further reducing tanker supply. Risks remain, with global economic growth slowing and recurring COVID-19 outbreaks in China. However, shifts to longer routes are still expected to support tanker demand growth. With a firm demand outlook, supportive supply trends and other inefficiencies impacting, tanker markets are generally expected to remain firm across 2023 and 2024. At the same time, we expect challenges as the fundamental supply-demand balance of the tanker market is delicate, and external factors such as geopolitical uncertainties and oil markets fluctuation can create disruptions for the tanker industry. There are a range of downside risks to the demand outlook, notably potential for lack of significant improvement in China’s oil demand next year if COVID-19 return due to new outbreaks, and from the slowing global economy. The shipping industry will be required to adapt to the new regulations such as EEXI and CII aimed at lowering carbon emissions and ensuring that vessels run efficiently from both an environmental perspective going forward. However, as ever with the introduction of new regulations, owners and charterers will need to carefully consider the commercial, legal, and contractual position in advance amongst themselves to avoid potential disputes as the new regulations come into force. Based on our analysis of sustainability imperatives, AET will maintain our focus on seeking out opportunities that will generate sustainable longterm revenue and reduce our GHG emissions. In 2023, we will take delivery of three newbuild LNG dual-fuel VLCCs, all on long-term charter contracts with Shell. Our business objectives remain fundamentally geared towards pursuing long-term sustainability by growing our secured income portfolio and participating in new low-carbon shipping opportunities either on our own or through strategic partnerships. In the existing petroleum shipping asset classes, AET will continuously improve its energy efficiency and invest in cleaner and greener solutions to rejuvenate our Mid-Size Tanker and VLCC fleet and decarbonise operations. We will leverage on our core competencies to maintain our lightering footprint and position in the US Gulf of Mexico. In the DPST sector, we will maintain our competitive and leading position as among the global top three providers. • Eagle Valence – amongst the world’s first dual-fuel VLCCs: »» Won Tanker of the Year Award at the TS&T Conference, Awards & Exhibition 2022 »» Certified as a Green Ship as part of the MPA GSP at the SRS Forum • CSA presented 43 ships from AET with Environmental Achievement Awards • CSA awarded 48 ships from AET with the Jones F. Devlin Award for Safety RENEWED CONTRACTS TO MAINTAIN SUSTAINABLE BUSINESS GROWTH In 2022, AET secured five new lightering contracts and renewed 13 lightering contracts in North and South America. In the Mid-Size Tanker segment, AET secured four new time charters and renewed two time charters. Meanwhile, in the VLCC segment, AET secured three new time charters. • Secured 5 new lightering contracts and renewed 13 lightering contracts in North and South America • Secured 4 new time charters and renewed 2 time charters in Mid-Size Tanker segment • Secured 3 new time charters in the VLCC segment MOVED INTO A LARGER OFFICE IN BRAZIL AET has remained committed to creating positive impact on communities in our markets of operation through our community investment. We continued to support communities impacted by the pandemic in partnership with charity organisations including foodbanks. As part of our COVID-19 donation campaign, we partnered with Matsentralen Rogaland in Norway, RioContraCorona in Brazil, Philippine Business for Social Progress, The Felix Project, Houston Foodbank and Galveston County Foodbank as well as Singapore Children’s Society. We have funded over one million meals through these partnerships supporting impacted families in 2022. Several of our colleagues joined the handover ceremonies in 2022 with the charity organisations and learned more about their operations. Expanding on our partnerships our colleagues also volunteered their time in support of these organisations. • In Singapore, AET partnered with Singapore Children’s Society to organise a cooking workshop to encourage some of their youth to make healthy food choices and equip them with basic cooking skills. • In the UK, employees volunteered with The Felix Project to help prepare nutritious ready-made meals for distribution to families in needs and at the warehouse to sort and manage donated food. COMMITTED TO NURTURING FUTURE LEADERS AND CONTRIBUTING TO THE GROWTH OF THE MARITIME INDUSTRY Since 2020, AET has sponsored 15 students with scholarships. In 2022, AET sponsored two more students through the AETMaritimeOne scholarship in Singapore. For the third year running, AET is supporting students for the three-year Diploma in Maritime Business Programme at Singapore Maritime Academy – Singapore Polytechnic. Across the Atlantic, we awarded 10 scholarships to undergraduate students in partnership with the Texas A&M Foundation at the Texas A&M University Galveston Campus. The university is home to the Texas A&M Maritime Academy – a highly specialised maritime training and education programme. By awarding these scholarships, we aim to empower students with skills to become valuable members of the global maritime sector. Business Review Business Review 117 116 MISC Berhad Integrated Annual Report 2022
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