53 CORPORATE GOVERNANCE Sustainability Report (Cont’d) II. Overview and outlook of the UK Economy Inflation has more than halved from its recent peak and the government is continuing to support the Bank of England, with policy decisions at this event directly reducing inflation in 2024-25. The Office for Budget Responsibility (“OBR”) forecasts inflation to fall to its 2% target in Q2 2024, a year earlier than in their November 2023 forecast. As a result of falling inflation, real wages are rising. The OBR now expects living standards, as measured by real household disposable income per person, to grow by 0.8% in 2023-24 and continue to grow in each year of the forecast. Gross Domestic Product (GDP) grew by 0.1% in 2023 and the unemployment rate has remained low by historical standards at 3.8% in Q4 2023, below the OBR’s November 2022 forecast of 4.6%. Growth is now forecast to pick up from the first half of 2024 and the International Monetary Fund is forecasting that the UK will have the third fastest cumulative growth in the Group of Seven (G7) over the 2024-2028 period. The economy is beginning to turn a corner and the government is sticking to its plan: inflation is down, growth is forecast to improve and debt is on track to fall. The government is taking long-term decisions to cut taxes further for working people, reform how it delivers public services, and build a stronger economy and a brighter future for the UK. (Source: Spring Budget 2024, Her Majesty’s Treasury, UK) III. Overview and of the Group Operational Division a. Energy Logistic Services In 2024, the mining sector locally is forecasted to rebound by 2.7%, driven by remarkable performance in natural gas as well as crude oil and condensate subsectors. Anticipation of first natural gas production from new gas field development projects as well as higher production from the existing gas fields are estimated to boost the growth of the natural gas subsector. In terms of prices, the Brent crude oil is projected to average at USD85 per barrel on anticipation of higher demand given the positive global outlook for the year. Across the globe, major oil & gas companies have taken Final Investment Decisions on projects put on hold during the COVID-19 pandemic as the near-term outlook for demand improves Our FSO operation which deployed our vessel, Ratu ENRA and a SPM CALM Buoy system in Yetagun, Myanmar had ended in November 2023. The vessel is presently undergoing mandatory dry docking and special survey works, scheduled for completion by the end of Q1 FYE 2025. Following this, the vessel will promptly be deployed to initiate time chartering operations. This is anticipated to yield a positive contribution to the Group’s earnings. Having acknowledge the opportunities from emerging new gas fields as well as higher production from the existing gas fields coupled with stable oil price, the division is ready to build the energy logistics operations by building upon its experience in the business since 2018. b. MRO Services In the FYE 2024, the Group directed its efforts towards business development and marketing to position itself as a comprehensive specialist in MRO services for diesel power generation and propulsion equipment across multiple brands and model to wider its client base across other industries apart from traditional core oil & gas market. The encouraging oil & gas sector locally and internationally is expected to provide opportunities to the division. The Group believes that the time and effort it has invested in laying the foundation over the last several months and the positive response from the market will yield promising result in the near future.
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