© MISC Berhad (Company No. 8178-H) 2023. All Rights Reserved.

Navigating
a Sustainable
Future Together

Integrated Annual Report 2023

Key Highlights 2023

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Revenue

RM

0

billion

Operating Profit

RM

0

billion

Cash Flows From Operating Activities

RM

0

billion

Total Assets

RM

0

billion

Equity Attributable To Equity Holders of The Corporation

RM

0

billion

Earnings Per Share

0

sen

Dividends Per Share

0

sen

Constituent of

Member of the S&P Global Sustainability Yearbook since 2023

FTSE4Good Bursa Malaysia Index for 10 consecutive years

Above 99%

Vessel Availability

Above 99%

Vessel Utilisation

Above 90%

Floating Asset Uptime

Operating Safely & Sustainably

Zero

Major Security
Incidents
Major Cybersecurity Incidents
Major Spill Incidents

24%

Reduction in average GHG Intensity by our Fleet (GAS and Petroleum) Compared to 2008

3

Fatalities

People Development
Employees

Seafarers in MISC

72

Female

85%

Male

15%

Female

Key Messages

Datuk Abu Huraira Abu Yazid

Chairman’s Message

Captain Rajalingam Subramaniam

President/Group CEO’s Message

Raja Azlan Shah Raja Azwa

Vice President’s Message
Corporate Planning & Group Finance

Value Creation Business Model

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INPUTS

OUTPUTS/OUTCOMES

Our
Strategy

TRADE-OFFS

ACTIONS TO ENHANCE OUTCOMES

Anchoring Sustainability

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  • Financial Governance Framework (FRA/CFP)

  • Financial growth plans

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Table Header
  • Towards Decarbonisation
Short – Medium Term
  • Energy efficiency
  • Collaboration on alternative fuel research and development
  • Transition to low carbon fuel
  • Renewable energy mix

Long Term

  • Transition to decarbonised fuel
  • Promoting Circular Economy
  • 4R – Refuse, Reduce, Reuse & Recycle
  • Ship recycling
  • Greater renewable resource utilisation
  • Biodiversity Conservation
  • Marine biodiversity conservation
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Table Header
  • Talent Excellence
  • Talent development

  • Engaged workforce
  • Community Investment

  • Youth entrepreneurship education

  • CSR on education
  • Health & Safety

  • Employee safety, health and well-being

  • Contractor safety

  • Process safety
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Table Header

  • Governance & Business Ethics

  • Robust Culture

  • Assurance

  • Cybersecurity

  • Responsible Supply Chain Management

  • Assurance

  • Collaboration
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Section
Description
Reference
Governance
  • Established an effective governance structure, led by the Board and supporting committees, to provide oversight, evaluate and manage climate-related matters and their associated risks and opportunities
  • Disclosed the frequency of Board meetings per year to discuss and deliberate on sustainability and climate-related issues

Sustainability Report(please refer to page 73)

Strategy
  • Ensured alignment with IMO’s decarbonisation goals, targeting a 50% reduction in GHG intensity by 2030 and Net-Zero GHG emissions by 2050. This commitment extends across our value chain
  • Established approach involving short to medium-term growth through our business plans, prioritising business demands and actively addressing climate change risks
  • Identified Time Horizons:
    • Established short, medium and long-term time horizons, aligned with regular business planning cycles, with asset lifespan and business impact evaluation taken into consideration
    • Ensured short planning cycles mirrored industry changes, enabling prompt adaptation to evolving needs
  • Disclosed strategic plans to manage climate-related risks and opportunities

Sustainability Report(please refer to pages 74 to 79)

Risk Management
  • Identified nine significant climate-related physical and transition risks and opportunities based on driving forces
  • Categorised climate-related risks and opportunities systematically, emphasising those with high importance based on their impact, significance and stakeholder interest
  • Material risks and opportunities identified will be integrated into our strategic priorities within our business plan

Sustainability Report(please refer to page 80)

Metrics and Targets
  • Identified performance indicators and benchmarks to manage climate-related risks and opportunities:
    • Medium-term target: 50% reduction in GHG intensity (for shipping operations) by 2030
    • Long-term target: Net-Zero GHG emissions by 2050

Sustainability Report(please refer to pages 81)

Sustainability Report

MISC Group is one of the world's leading providers of international energy-related maritime solutions and services.

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Chairman's Message

Dear Stakeholders,

In 2023, MISC continued to face a vulnerable landscape with a combined threat of geopolitical conflicts, inflation, energy security and climate crisis. Geopolitical tensions disrupted supply chains and escalated costs, compounded by the rapid energy transition and lingering impacts of the pandemic. Despite these challenges, as a leader in the shipping industry, we have demonstrated our ability to adapt and lead with agility and foresight. Our approach during these uncertain times is to remain steadfast in our performance and delivery. We recognise these challenges as opportunities to emerge as an industry leader in a low-carbon economy, while ensuring that we continue to meet current energy demands. By balancing our core energy business with low-carbon ventures, we strive to forge a path towards a more resilient future, benefitting both our business and the communities we serve.

DATUK ABU HURAIRA ABU YAZID

Chairman

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President/Group Chief Executive Officer’s Message

Dear Stakeholders,

2023 was a dynamic year. Recent times have unveiled challenges of unprecedented scale, from the impacts of COVID-19, worsening geopolitical tensions to society’s intensifying demand to accelerate the energy transition. In 2023 these challenges prompted a critical reflection – how do we translate our ambition into action?

This year has been a testament to such perspective, signifying a pivotal period of strategic recalibration and operational advancement for MISC, as we forge ahead in the shift from emissions to solutions. A year where we have again shown resiliency as a team.

CAPTAIN RAJALINGAM SUBRAMANIAM

President/Group Chief Executive Officer

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Vice President’s Message Corporate Planning & Group Finance

Dear Stakeholders,

In the context of our industry’s constantly evolving landscape, the Group faced various challenges that arose from macroeconomic and geopolitical developments. The uncertainties stemming from the Russia-Ukraine and Middle East conflicts amidst an unfavourable global interest rate environment, continue to cast a shadow over the global economic landscape. At MISC, we remain committed in transitioning towards the clean energy sector, leveraging on our core strengths in project delivery and asset optimisation to drive growth.

RAJA AZLAN SHAH RAJA AZWA
Vice President, Corporate Planning
(effective 1 March 2024)
Vice President, Group Finance
(until 29 February 2024)
Download Vice President’s Message Corporate Planning & Group Finance
Input

F

Financial Capital

  • Total Assets of RM65.1 billion
  • Shareholders’ equity of RM39.3 billion
  • Cash and cash equivalents of RM7.7 billion
  • Debt of RM17.5 billion

P

Physical Capital

  • 31 LNGCs
  • 6 VLECs
  • 1 LBV
  • 2 FSUs
  • 64 Petroleum and product tankers
  • 13 Floating assets
  • Marine and heavy engineering facilities
  • Maritime training facility

H

Human Capital

  • Diverse and inclusive workforce of 10,435 employees from 46 nationalities
  • 15% of employees are women
  • RM54.9 million invested in capacity building for employees
  • 2,235 total new hires (shore employees only)

SR

Social and Relationship Capital

  • RM29.6 million invested in ALAM cadet sponsorships
  • Maritime education scholarships to promote youth development
  • 247 employees volunteered in the HOTO programme since 2021

I

Intellectual Capital

  • 55 years of experience in the maritime industry
  • Collaborations on clean energy solutions and decarbonisation initiatives

N

Natural Capital

  • 16,634,887 megawatt-hours of energy consumption
  • Reliance on natural resources such as fuel, water and land
Outputs/Outcomes

F

Financial Capital

  • Revenue of RM14.3 billion
  • Profit after tax of RM2.0 billion
  • CFO** of RM6.5 billion
  • Dividend payout of 36 sen per share
  • Credit rating of S&P Global Ratings at BBB+, Moody’s Ratings at Baa2

P

Physical Capital

  • Transported 6% of global LNG
  • Transported approximately 134 million tonnes of crude and petroleum products globally
  • Above 99% for vessel availability
  • Above 99% for vessel utilisation
  • Above 90% for offshore floaters’ uptime

H

Human Capital

  • 26.5 total average training hours per shore employee
  • LTIF at 0.09
  • TRCF at 0.31

SR

Social and Relationship Capital

  • Sponsored 829 ALAM cadets
  • 13 sponsored students under the maritime education scholarships
  • Engaged 13 families within the community in the HOTO programme

I

Intellectual Capital

  • 2 AiPs secured
  • 13 accolades received
  • 8 owned dual-fuel vessels
  • 1 FSU award

N

Natural Capital

  • Recorded 4.15 million tCO2e of Scope 1 & 2 GHG emissions
  • 24% reduction in our fleet average CO2e intensity compared to 2008
  • Recycled, reused or recovered 99.9% of hazardous waste
  • Zero major oil spill
Trade-offs

F

Financial Capital

  • Majority of our capital is allocated towards operating and maintaining our fleet, ongoing project requirements, new CAPEX investments and purchasing new assets
  • While CAPEX allocations reduce our financial capital in the short-term, they build our physical capital base for longer term growth
  • Our long-term customer contracts for newbuild and purchased assets ensure secured income streams, thus growing our financial capital into the future
  • Investment in digitalisation and innovation initiatives to drive operational and organisational efficiencies has reduced our financial capital in the short-term but will enhance our intellectual capital in the long-term

P

Physical Capital

  • Our capital mainly consists of our vessel fleet, floating assets, yards and infrastructure. We focus on investments in eco-friendly newbuilds with lower emissions, to provide greener shipping solutions and enhance our natural capital
  • We are providing customers with an eco-friendly fleet, improved efficiency and safety measures. This enhancement boosts our social and relationship capital
  • We reduce obsolete physical capital by disposing older assets through green ship recycling initiatives. This positively impacts our natural capital and aligns with energy transition and climate change imperatives for sustainable long-term growth

H

Human Capital

  • Our human capital, including capabilities, skills and knowledge, drives our intellectual capital. We invest our financial capital in human capital through talent development programmes and strategic human capital management aligned with our business plans
  • The short-term reduction of our financial capital to sustain our human capital enables us to strengthen the capabilities of our workforce to respond to clients’ needs and exceed customer expectations, thus building our social and relationship capital in the long-run

SR

Social and Relationship Capital

  • We invest financial capital in stakeholder engagements conducted by our employees, which impact our human capital through the manhours spent. The expenses associated with engagements reduce short-term financial capital; however, in the long-term they enable growth of social and relationship capital, ensure compliance with legal requirements, pave the way for sustainable future growth and maintain industry reputation
  • We undertake industry collaborations focusing on zero-emission vessels
  • Our community-based environmental programmes positively impact our natural capital
  • The growth of our social and relationship capital ultimately contributes to increasing our financial capital as we maintain and expand our customer base

I

Intellectual Capital

  • We invest financial capital to drive our intellectual capital by rejuvenating our fleet with the latest technologies, which improves our natural capital through a lower emission fleet and enhance human capital through new skills while boosting our social and relationship capital from improved customer satisfaction
  • In the short-term, our financial capital is reduced with investment in technical solutions for floating assets, new technologies for port management, vessel inspections and yard operations. In the long-run, the investment will boost our intellectual capital across our maritime value chain

N

Natural Capital

  • Our physical capital’s emissions and waste have a negative impact on our natural capital. Towards improving our natural capital and in line with energy transition, climate change and industry decarbonisation, we established MISC’s 2030 Aspiration and commitment towards Net-Zero GHG emissions aligning with the MISC 2050 Vision
  • Efforts towards improving our natural capital will reduce our financial capital in the shorter term and impact on our human, intellectual and physical capitals. Improvement of natural capital will heighten our social and relationship capital, as MISC commits to a sustainable future
Actions to Enhance Outcomes

F

Financial Capital

  • Secured stable cash flows from long-term contracts
  • Prudent management of financial commitments, disciplined in capital allocation and responsible investment
  • Strove to adopt the highest standards of governance and transparency, including TCFD

P

Physical Capital

  • Maintained a strong track record of operational excellence
  • Diversified our portfolio of businesses to mitigate against market volatility and business cyclicality
  • Initiated decarbonisation efforts across our business and operations

H

Human Capital

    Prioritised employee well-being by fostering psychological safety at the workplace
  • Encouraged continuous learning, collaboration and a culture of innovation
  • Facilitated comprehensive retention programmes, including employee engagement activities, immediate recognition and flexible work arrangements
  • Prioritised health and safety by promoting Generative HSSE culture across our businesses and operations

SR

Social and Relationship Capital

  • Rejuvenated ALAM campus to provide students with a conducive learning environment and to foster academic excellence
  • Continued to cultivate young talents and develop future leaders by providing scholarships in maritime education
  • Actively engaged employees in various volunteering programmes to positively contribute to communities where we operate

I

Intellectual Capital

  • Established an NED unit to drive the decarbonisation pathway and seek new business portfolios
  • Actively pursued opportunities to commercialise clean energy and decarbonisation concepts and designs
  • Ongoing development of zero-emission vessels together with other partners under the Castor Initiative

N

Natural Capital

  • Initiated decarbonisation efforts aligning with our transition plan to ensure that our newbuild vessels are equipped with eco-efficient technologies and energy-efficient solutions
  • Introduced marine biodiversity conservation initiatives to conserve and rehabilitate marine biodiversity
Sustainability Pillar Achievements Material Matter SDGs
Financial
  • Revenue: RM14.3 billion
  • Operating Profit: RM2.9 billion
  • CFO*: RM6.5 billion
  • Received delivery of two LNGCs, Seri Damai and Seri Daya for SRM
  • Delivered two VLCC tankers powered by dual-fuel LNG engines, Eagle Vellore and Eagle Ventura to Shell. A third LNG dual-fuel VLCC was delivered in early 2024.
  • Unveiled the design of a future ready NBFPSO unit which uses the Mega-Module topsides and incorporated sustainable technologies into the design

Sustainability Pillar Achievements Material Matter SDGs
Environment

Towards Decarbonisation

  • Facilitated workshops and a panel discussion among the Castor
    Initiative members to discuss current regulations and guidelines,
    challenges and detailed concepts of the ammonia storage and fuel
    pre-treatment systems
  • Achieved 24% reduction in our fleet average GHG intensity compared
    with 2008
  • Recorded 7.10 million tonnes in total GHG emissions

Promoting Circular Economy
  • Conducted four Ship Recycling Yard audits in Turkey
  • Recycled almost 100% of hazardous waste generated from shore operations
Biodiversity Conservation
  • Surveyed 36 coral reef sites
  • Rehabilitated three coral sites
  • 77% turtle nest hatching success rate

  • Conserved 1,916 turtle nests since 2020

  • Collected 10,011 kg of trash since 2020
Sustainability Pillar Achievements Material Matter SDGs
Social
Health and Safety

  • Attained a score of 4.16 in the MISC HSSE Cultur e Maturity Survey

  • Achieved 28 million man-hours without LTI for the MERO 3 Project

  • 102,342 UCUAs raised

Talent Excellence

  • Achieved 81% in PETRONAS Organisational Cultural Survey

  • Recorded 92.6% high-performing talent retention

  • Invested RM33.1 million in training and development programmes for seafarers

  • Promoted two female officers to captains

  • Accepted the first two female pilots and introduced the first female OVID Inspector
Community Investment
  • Provided cadet sponsorship for 829 students at ALAM with an investment of RM29.6 million
  • Awarded maritime scholarships to nine new students in collaboration with Texas A&M Foundation, MaritimeONE and Newcastle University
Sustainability Pillar Achievements Material Matter SDGs
Governance
Values, Assurance and Business Ethics

  • 40% female Board members

  • Attained ISO 37001: 2016 Anti-Bribery Management System (ABMS) certification for ALAM

  • Trained 2,801 employees in human rights matters

  • Recorded zero major cybersecurity incidents and data breaches

Responsible Supply Chain

  • Rolled out the Sustainable Procurement Statement

  • Completed supply chain ESG self-assessment for 55% of critical suppliers