Established our in-house maintenance team LOA from PETRONAS and SEA Hibiscus for SPM refurbishments Obtained Grand Award for safe operations at Sungai Udang Port at the MSOSH Occupational Safety and Health Awards 2022 PORT MANAGEMENT & MARITIME SERVICES KEY DEVELOPMENTS ADVANCED INTO THE SINGLE POINT MOORING (SPM) SPACE EXPANDED INTO LNG BUNKERING ENHANCED OUR CAPABILITY ENHANCED OUR BUSINESS PROCESSES WITH EXTERNAL CERTIFICATIONS HEALTH AND SAFETY AS OUR TOPMOST PRIORITY In 2021, we had begun expanding our scope for SPMs in line with our long-term goal of generating sustainable business growth. Our aspiration is to become the single operator for SPMs covering the operation and maintenance of assets. During the year, we made successful inroads into this area by securing a Letter of Award (LOA) from PETRONAS and SEA Hibiscus to perform SPM refurbishment jobs in Sarawak and Labuan. Another opportunity identified to drive our future growth was tapping into the fast-growing LNG market. The LNG market has been steadily growing on the back of greater demand for LNG-fuelled vessels as a transition fuel towards industry decarbonisation by 2050, as LNG is an eco-friendly alternative to oil-fuelled vessels. MMS has identified the LNG market as one we could support by providing services such as Ship-to-Ship (STS) LNG bunkering and LNG breakbulk. In 2022, we advanced in our strategic journey by performing our first LNG bunkering STS in Sungai Udang Port. In addition, we also provided Person in Overall Advisory Control (POAC) services for the coordination of The International Convention for the Prevention of Pollution from Ships (MARPOL) Annex 1 cargos during an STS operation in Labuan, representing our first POAC service offering. • Performed 1st STS LNG bunkering in Sungai Udang Port • Provided POAC services for STS operations for the first time in Labuan Certification in 2022: Towards ensuring that we develop our in-house capabilities in tandem with our business development plans, we have enhanced our capability through several measures. In 2022, we developed our own in-house maintenance team, complete with our own equipment, manpower and workshops. With the existence of this team, we will be able to reduce our operational costs as we can reduce outsourcing to external parties. In 2022, we were certified with the ISO 37001:2016 Anti-Bribery Management System (ABMS) which underpins our approach of running our business in a trustworthy manner as well as our commitment to upholding the highest standards of ethics and governance. The ABMS enables us to prevent, detect and address bribery issues by adopting an anti-bribery policy, having a dedicated function which oversees antibribery compliance, training, risk assessments and due diligence on our projects as well as vendors and sub-contractors, among other matters. Health and safety continued as one of our most important focus areas for 2022. Testament to our long held top notch health and safety reputation, since 1999 MMS has consistently achieved zero LTI in our operations. This achievement proves our capability in operating our services in a safe manner, thus inspiring the trust and confidence of our clients. During the year, we were awarded the Malaysian Society for Occupational Safety & Health (MSOSH) Grand Award at the Occupational Safety and Health Awards for our excellent occupational safety and health performance in 2022 at Sungai Udang Port. The award reflected our commitment to upholding the highest standards of safety when operating our ports. MOVING FORWARD For the year ahead, we expect the oil and gas (O&G) industry to be shaped by the Organization of the Petroleum Exporting Countries plus (OPEC+) production cut of 2 million barrels announced in November 2022 which will be enforced until the end of 2023. With Malaysia forming part of the OPEC+ group, Malaysia has committed to cutting oil production by 27,000 barrels per day, resulting in a production of 567,000 barrels per day. This decision, together with a slight decline in the production profile forecasted for 2023, will have an impact on MMS as it will reduce the number of operations for both port and terminal management and maritime services. However, oil prices are forecasted to stabilise at a healthy level in the coming year. Better industry conditions will lead to our clients pursuing more projects in the O&G sector, which could potentially improve demand for our services. In the medium-term future, increasing operational costs could pose a challenge as manpower, charter hire, and other operating cost trend upwards. This will impact our ability to enter into new markets. As such, exploring more ways to remain cost effective is crucial. Bearing in mind both future risks and opportunities, our focus remains on further driving business growth. We plan to pursue new sustainable business models that will deliver long term growth and at the same time, to drive our operational excellence to sustain our income base. Even as we develop new businesses with PETRONAS, we will concurrently continue to explore new opportunities with non-PETRONAS clients. Our growth strategy will see us focusing on expanding our regional and international presence, by capturing new clients, obtaining more SPM and jetties projects, acquire technologically advanced tugboats and continue to penetrate the burgeoning LNG market. ISO 37001:2016 Anti-Bribery Management System (ABMS) We will shore up our capability and capacity by building an agile, future ready team of marine professionals. Our talent excellence agenda will see us focusing on upskilling our marine professionals to cater for niche markets as we continue with asset expansion to further enhance our operational capability and capacity. This includes training and developing our talents to meet PFLNG and LNG business requirements. Leveraging on technology and digitalization, we will distinguish ourselves from our competitors. We plan to further integrate digital systems and data analytics in our operations for better efficiency, which will act as a differentiator for MMS. We believe that working together with the MISC fraternity will benefit the Group as we set to embark in developing new ship management capacity by collaborating with Eaglestar in terms of managing our future tugboat fleet. By having our own tugboat fleet, we will be able to minimise the risks of relying on third-party providers as well as optimise our operation costs in the long run. Business Review Business Review 137 136 MISC Berhad Integrated Annual Report 2022
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