PRESIDENT/GROUP CEO’S MESSAGE 3. Deepening strategic relationships with customers We created further value for stakeholders across our businesses by deepening our long-term relationships with customers, through collaboration where appropriate. In 2022, our GAS business won long-term contracts for 12 LNG carriers from QatarEnergy (as a consortium member), and 2 LNG carriers from SeaRiver Maritime LLC. Our Petroleum business took delivery of 8 eco-friendly new tankers, which are all entered into long-term time charters. In the oil and gas sector, our Marine & Heavy Engineering business was awarded the FEED and EPCIC contracts for the Kasawari CCS project from PETRONAS Carigali Sdn Bhd and the EPC services contract for the offshore platform for the Rosmari-Marjoram gas project from Sarawak Shell Berhad. Our Offshore Business Unit won contract extensions on 2 FPSOs, the Bunga Kertas and Ruby 2. 4. Decarbonisation In 2022, we formalised our commitment to net-zero GHG emissions by 2050 within our own operations as well as across our value chain. This dovetails our commitment to a 50% reduction in carbon intensity in shipping by 2030. Our decarbonisation pathway utilises LNG as a transitionary fuel today while we work proactively on the development of tomorrow’s next generation zero-emission vessels (ZEVs). In 2022, we expanded our collaborations to strengthen our future focused asset portfolio. In 2022, we took delivery of 2 LNG dual-fuel VLCCs, among the first in the world. This, together with the other 6 modern and eco-friendly tankers, form a significant step forward in our fleet rejuvenation plan. In the meantime, our work to make ammonia powered ZEVs a reality continues in partnership with like-minded industry leaders throughout the maritime value chain. In 2022, we were delighted to welcome TotalEnergies into the Castor Initiative, a global coalition founded by MISC and others, focused on developing ammonia powered ZEVs. Separately, we entered 2 MOUs for the development and construction of ammonia ZEVs with PTT, and Samsung Heavy Industries/Lloyd’s Register. Delivery of the vessels are expected by early 2026. As outlined above, our Marine & Heavy Engineering business continues to support the oil and gas sector’s decarbonisation efforts through its involvement in the Kasawari CCS and Rosmari-Marjoram projects. The Kasawari CCS project is both Malaysia’s first CCS project and the world’s largest offshore CCS project by volume of CO2 captured, while the unmanned Rosmari-Marjoram platform will be primarily powered by renewable energy. 5. Sustainability and MISC 2050 We are cognisant that we must continuously adapt our business and drive industry change. We are two years into our 2021-2025 Sustainability Strategy which is seeing us operationalise and institutionalise our ESG commitments Group-wide. We are taking several pro-active steps to embed ESG imperatives purposefully within our business and more details can be found within our Sustainability Report 2022. Our long-term strategy is focused on developing a new portfolio of businesses within the renewable energy and waste-to-value markets. Sustainability is the confluence of the environmental agenda and commercial viability, and recognising this is the key driver of our progress. To this end, in 2022 we created a dedicated task force to scope the possibilities in CCUS. Work on this will continue in 2023 with the incubation of a new green energy unit under my office. 6. Digital transformation In 2022 we continued our digital transformation strategy. We focussed on investments in start-ups that are developing technologies which will support the transition of the maritime sector to net-zero, and on transforming our internal DNA to become a more datadriven organisation. This is being delivered through the transformation of our finance, procurement and document control systems. We are on track with our internal transformation plan which when complete will enable our people to use advanced analytics tools and access data to gain insights into our operations and thus make more data-driven decisions to drive our business growth. MISC is passionate in embracing diversity and inclusion within our workforce, as the source of an organisational culture that drives innovation. The MISC Diversity and Inclusion (D&I) Policy was implemented in 2022 through the establishment of a D&I Journey Map and Aspirational Targets and supplemented with activities to raise awareness. deliver further value to stakeholders by transforming our business model and reinforcing our pathway to achieving net-zero by 2050, all underpinned by the UNSDG’s we have adopted. We will continue to align and collaborate with key industry leaders to drive this agenda. Our efforts will be supported by the enhancement of our organisational culture and behaviour through the adoption of a broader international and adaptive mindset, while we continue to invest in the reskilling and upskilling of our workforce to meet the challenges of tomorrow. PUTTING OUR PEOPLE FIRST 2023 is filled with opportunities for MISC. The strength of our organisation, our brand and, most importantly, our people, means we are well placed to capture these. The year ahead will see us shifting gears both in terms of the execution of current projects and advancement towards achieving our 2050 objectives. External uncertainties will persist, as always. Ongoing geopolitical tensions will continue to disrupt global stability, economic development and trade patterns. Simultaneously, the energy transition will gather pace, driven by growing demand for cleaner energy and energy security. This will present new opportunities to us as we pivot. At the same time, we expect sustained increases in demand for LNG shipments particularly into Europe. New maritime regulations arising from the global decarbonisation agenda also present opportunities. The dynamic regulatory landscape will drive the future focus of new capex investment on greener assets, namely dual-fuel vessels and low carbon emission assets. Demand for the right talent will continue to be intense. This is exacerbated by higher inflation and consequent wage demands. Reskilling our talent for the future is a challenge, but an essential one which also presents tremendous opportunity. LOOKING AHEAD INTO 2023 Our people are the foundation of everything we do. We remain focussed on improving our employee value proposition, while maintaining equitability among our diverse talent population across our global portfolio. In 2022, as the world opened up we continued to support our staff’s wellbeing and provide necessary assistance where required. We continue to further empower and engage with our staff, while investing in future-proofing our people through upskilling programmes that promote continuous professional and leadership development. OUR STRATEGIC PLAN FOR 2023 A NOTE OF THANKS On behalf of MISC, I would like to extend our sincere appreciation to our valued shareholders, customers and partners for their trust, faith and support to MISC. Our gratitude also goes to the MISC Board of Directors for their steadfast commitment in upholding the highest standards of governance and for their insightful and valuable guidance. We at MISC are cognisant that we must adapt to a world changing at an ever-increasing speed. It is imperative that we accelerate our own transformation as the world around us changes rapidly. There is a great deal more to do. For MISC, “Moving Energy” means much more than merely the transportation of cargo. It is the progress of our people and mindsets, anchored in our values, and driven by our ambition and passion to create a better future – in short, it is who we aspire to be. With 2022 as MISC’s year of Powering Resilience, we move forward with growing confidence that the Group is on track to achieve our shared aspiration of building a Sustainable Future. I look forward to working together with our stakeholders to improve our value proposition as an organisation. Thank you for your trust and support as always. We will maintain our focus on project execution, while remaining open to opportunistic investment where it meets our strategic aims and creates long-term shareholder value. The current market landscape is supportive of our growth trajectory, but to ensure our long-term future success we must re-assess our businesses portfolio and strategy. A strategic business review is underway, and in 2023 we shall Key Messages Key Messages 31 30 MISC Berhad Integrated Annual Report 2022
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