INTEGRATED ANNUAL REPORT 2024 RAISING THE BAR
The theme “Raising the Bar” reflects our ongoing journey towards greater achievements in sustainability, operational excellence, and leadership. It highlights the tangible results of our initiatives, showing how the steps we took last year have translated into measurable progress. We are not just adapting to change—we are leading it and setting new benchmarks for ourselves and the industry. The cover of our Integrated Annual Report this year features a dynamic illustration that embodies the spirit of our 2024 theme. The layered structure, formed by vibrant silhouettes of people in action, represents the collective strength, collaboration, and dedication of our workforce. As the figures ascend, they symbolise growth, progress, and the continuous pursuit of excellence, with each level building on the solid foundation of our past achievements. The integration of industrial, renewable energy, and natural elements encapsulates our dedication to sustainability, innovation, and leadership in the evolving energy landscape. This visual narrative captures how we are not just adapting to change but actively driving it—setting higher standards for ourselves, our industry, and the future. This embodies our commitment to exceeding expectations, pushing boundaries, and delivering outstanding performance across all operations. It marks our proactive role in driving change, with a strong focus on sustainability, collaboration, and creating lasting value. RAISING THE BAR 4 Who We Are 6 Where We Operate + What We Do 8 Corporate Information 10 2024 Key Performance Highlights Overview of Wasco Berhad Key Messages 12 Chairman and Managing Director/ Group Chief Executive Officer’s Statement 18 Chief Financial Officer’s Review 24 Financial Highlights 26 Value Creation Model 33 Key Market Trends 36 Strategic Roadmap & Progress 39 Key Risk and Mitigation Strategies Value Creation This report and additional information on Wasco Berhad are available online at our corporate website, www.wascoenergy.com. Online Version
INSIDE THIS REPORT 44 Chief Strategy Officer’s Statement 46 About This Report 48 Sustainability Across Our Operations 53 Stakeholder Engagement 56 Managing Our Material Matters 58 Sustainability Risks Management 60 Targets and Performance/Performance Scorecard 61 Governance 63 Economic 66 Environmental 86 Social 101 ESG Performance Data 104 Bursa Malaysia Sustainability Reporting Data 106 Statement of Assurance Sustainability Journey 111 Profile of Board of Directors 120 Profile of Key Senior Management Team 126 Audit Committee Report 132 Nomination and Remuneration Committee 138 Board Sustainability Committee 143 Corporate Governance Overview Statement 163 Additional Compliance Information 164 Statement on Risk Management and Internal Control 167 Statement of Director’s Responsibility Commitment to Governance 169 Directors’ Report 173 Statement by Directors 173 Statutory Declaration 174 Independent Auditors’ Report 179 Statements of Financial Position 181 Statements of Profit or Loss 182 Statements of Other Comprehensive Income 183 Consolidated Statement of Changes in Equity 185 Company Statement of Changes in Equity 186 Statements of Cash Flows 189 Notes to the Financial Statements Financial Statements 301 Summary of Significant Recurrent Related Party Transactions 302 Top 10 List of Properties 304 Analysis of Shareholdings 308 Notice of Twenty-Fifth Annual General Meeting 314 Statement Accompanying Notice of Twenty-Fifth Annual General Meeting Proxy Form Other Information
ABOUT THIS REPORT SCOPE AND BOUNDARY OF REPORTING This Integrated Annual Report covers the reporting period from 1 January 2024 to 31 December 2024, unless otherwise specified. The information presented reflects the activities of Wasco Berhad and its subsidiaries (“Wasco” or “the Group”), including our subsidiaries, joint operations, joint ventures, and associates. References to “Wasco Berhad” or “the Company” refer specifically to the parent entity on a standalone basis. FORWARD-LOOKING STATEMENTS This report contains forward-looking statements regarding future performance. These statements and projections are based on current assumptions and conditions, which are subject to change and may involve uncertainty. A variety of factors could cause actual results to differ materially from those expressed or implied in these forward-looking statements. OUR TARGETED READERS This is our primary report to stakeholders, designed to meet the informational needs of long-term investors, including our equity and preference shareholders, as well as prospective investors. Additionally, we provide insights into how we create value for other key stakeholders, such as our employees, clients, business partners, regulators, and communities. MATERIALITY The information presented in this report addresses matters that are most material to our business and stakeholder value. We identify, prioritise and validate our material matters via a comprehensive three-step materiality assessment. INDEPENDENT COMBINED ASSURANCE STATEMENT The credibility of this report is underpinned by robust governance practices. Assurance for this report is provided by our Board of Directors, supported by external verification by PricewaterhouseCoopers PLT, our auditors for financial information and providers of limited assurance on selected non-financial information. FEEDBACK We welcome and value any feedback on this report from our stakeholders. Please direct your feedback or inquiries to: Chief Strategy Officer Suite 19.01, Level 19, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia Tel : +603-2685 6800 Fax : +603-2685 6999 E-mail : enquiry.investorrelations@wascoenergy.com is aligned to the United Nations Sustainability Development Goals and we prioritised 9 out of the 17 goals based on our ability to delivering greatest impact through our core business. OUR APPROACH TO DELIVERING IMPACT
ABOUT THIS REPORT OUR SIX CAPITALS CROSS REFERENCE MATERIAL MATTERS STAKEHOLDERS Government & Regulators Media Employees Shareholders & Investors Customers Suppliers & Contractors Local Communities Financial Capital Securing funding from capital providers is instrumental in supporting our business operations, augmenting the cash flow derived from both operational and investment sources F Human Capital Wasco’s unwavering commitment to nurturing a highly skilled regional workforce underscores our dedication to harnessing human capital as a pivotal asset in achieving our corporate objectives H Manufactured Capital Our state-of-the-art facilities, strategically positioned around the world, highlight our global reach and expertise M Intellectual Capital Our competitive edge in the energy industry is driven by our strong intellectual capital which encompasses our team’s expertise and innovation in niche market allowing us to adapt swiftly and lead in the sector I Social & Relationship Capital Our commitment transcends stakeholders, encompassing the communities where we operate, fostering collaboration, shared success, and responsible engagement S Natural Capital Our commitment to preserving capital drives sustainability. We minimise environmental impact, protect biodiversity, and manage resources responsibly for a sustainable future N Reference to another section in our Reports Reference to online source 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Health, Safety and Environment Product Quality Labour Practices Human Rights Waste Management Training & Development Diversity, Equity and Inclusion Business Ethics Risk Management Product Design Business Model Resilience Energy Management Greenhouse Gas Water Economic Material Sourcing Supply Chain Physical Impact of Climate Change Financial Institutions Partners and Principals
WASCO BERHAD 4 WHO WE ARE At Wasco, our core values of partnership and commitment are the foundation of who we are. These principles are deeply embedded in our vision, mission, and operational standards, shaping our identity and the way we engage with the industries we serve. As we elevate our services in the global energy landscape, our values play a crucial role in driving our cultural transformation. This dynamic synergy is designed to align with the next phase of growth, reinforcing a workplace culture that reflects our beliefs, philosophies, and priorities. Beyond shaping our internal identity, these values also strengthen our dedication to delivering innovative and value-driven solutions to our stakeholders. They serve as a guiding force in our commitment to energy transition, ensuring sustainability remains at the heart of our journey. As we move forward, our shared values not only honour our legacy but also set a clear direction for the future—one built on partnership, commitment, and proactive engagement in shaping a more sustainable energy landscape. Wasco’s Cultural Beliefs To deliver reliable and competitive solutions to the energy industry with net zero carbon emissions by the year 2026. Guided by our vision, we are dedicated to delivering reliable energy solutions and achieving net zero carbon emissions for Scope 1 and 2 by 2026. Our Vision To accelerate the global energy transition while enhancing value for all our stakeholders. Our mission is a powerful call to action, transcending the traditional company role. We are committed to leading the charge in accelerating the global energy transition, driving meaningful value for all stakeholders along the way. Our Mission
5 Overview of Wasco Berhad INTEGRATED ANNUAL REPORT 2024 Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information WHO WE ARE Our Core Values Grounded in partnership, driven by commitment — these values define who we are, how we work, and how we grow. Committed to Customers Integrity Safety Intolerant to Waste Passion Socially Responsible Performance Based
CANADA USA WASCO BERHAD 6 WHERE WE OPERATE + WHAT WE DO With a strong presence in Malaysia, we have successfully expanded our footprint globally across 14 countries. Wasco is a recognised leader in pipeline coatings and offshore corrosion protection, supporting the oil & gas, Liquefied Natural Gas (“LNG”), and carbon capture and storage (“CCS”) sectors. With over 22,000 km of pipelines coated across 25 countries, our proven track record underscores our commitment to quality and performance. Our capabilities also include the manufacturing of spiral-welded steel pipes, providing a complete solution for pipeline infrastructure needs. PIPELINE SERVICES MALAYSIA Kuala Lumpur (HQ) Pahang | Selangor | Sabah UNITED KINGDOM Hartlepool NETHERLANDS Enschede ITALY Padova USA Louisiana CANADA Regina DUBAI Jafza QATAR Doha TANZANIA Dar Es Salaam | Sojo INDIA Gujerat CHINA Hubei AUSTRALIA Queensland SINGAPORE INDONESIA Batam | Medan
CHINA AUSTRALIA MALAYSIA SINGAPORE INDONESIA DUBAI INDIA QATAR UK NETHERLANDS TANZANIA ITALY 7 Overview of Wasco Berhad INTEGRATED ANNUAL REPORT 2024 Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information WHERE WE OPERATE + WHAT WE DO Wasco is a regional leader in biomass energy solutions, supplying high-efficiency steam turbines, industrial boilers, and waste-to-energy systems. Serving 70% of the agro-industrial sector, our solutions are powered by renewable sources like biomass and natural gas. Through innovations such as Heat Recovery Steam Generator (“HRSG”) technology with over 80% efficiency, we help clients reduce emissions and achieve cleaner, more sustainable operations. BIOENERGY SERVICES Wasco delivers agile and integrated Engineering, Procurement and Construction (“EPC”) and modular fabrication solutions tailored to the needs of the global energy sector. Operating from strategically located facilities in Southeast Asia and the Middle East, we support a wide range of projects across upstream, midstream, and downstream segments—including Floating Production, Storage, and Offloading (“FPSO”) topside modules, power generation systems, and renewable energy infrastructure. Our solutions are designed for scalability, efficiency, and resilience, helping clients navigate the transition to cleaner energy systems. ENGINEERING & FABRICATION SERVICES
WASCO BERHAD 8 CORPORATE INFORMATION DIRECTORS Dato’ Seri Robert Tan Chung Meng Non-Independent Non-Executive Chairman Gian Carlo Maccagno Managing Director/ Group Chief Executive Officer Tan Sri Saw Choo Boon Senior Independent Non-Executive Director Datin Wan Daneena Liza Binti Wan Abdul Rahman Independent Non-Executive Director Lily Rozita Binti Mohamad Khairi Independent Non-Executive Director Halim Bin Haji Din Non-Independent Non-Executive Director Tan Sri Professor Lin See Yan Non-Independent Non-Executive Director Tan Jian Hong, Aaron Non-Independent Non-Executive Director COMMITTEE AUDIT COMMITTEE NOMINATION & REMUNERATION COMMITTEE BOARD SUSTAINABILITY COMMITTEE* Chairman Datin Wan Daneena Liza Binti Wan Abdul Rahman Tan Sri Saw Choo Boon Lily Rozita Binti Mohamad Khairi Member Halim Bin Haji Din Tan Sri Professor Lin See Yan Tan Sri Professor Lin See Yan Member Tan Sri Saw Choo Boon Lily Rozita Binti Mohamad Khairi Datin Wan Daneena Liza Binti Wan Abdul Rahman * The Governance, Compliance & Risk Committee changed its name to Board Sustainability Committee with effect from 29 August 2024.
9 Overview of Wasco Berhad INTEGRATED ANNUAL REPORT 2024 Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information GROUP COMPANY SECRETARY Woo Ying Pun (MAICSA 7001280) SSM Practicing Certificate No. 201908002179 AUDITORS PricewaterhouseCoopers PLT (LLP0014401 – LCA & AF 1146) Chartered Accountants Level 10, Menara TH 1 Sentral Jalan Rakyat Kuala Lumpur Sentral 50706 Kuala Lumpur, Malaysia SOLICITORS Rahmat Lim & Partners PRINCIPAL BANKERS HSBC Bank Group Malayan Banking Berhad OCBC Bank Group RHB Bank Berhad PRINCIPAL ADVISERS Maybank Investment Bank Berhad RHB Investment Bank Berhad CIMB Investment Bank Berhad SHARE REGISTRAR Tricor Investor & Issuing House Services Sdn. Bhd. Unit 32-01, Level 32, Tower A Vertical Business Suite, Avenue 3 Bangsar South, No. 8, Jalan Kerinchi 59200 Kuala Lumpur, Malaysia Tel : 603-2783 9299 Fax : 603-2783 9222 Email : is.enquiry@my.tricorglobal.com CORPORATE INFORMATION REGISTERED OFFICE ADDRESS Suite 19.01, Level 19 The Gardens North Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia Tel : 603-2685 6800 Fax : 603-2685 6999 Email : enquiry@wascoenergy.com Website : www.wascoenergy.com PRINCIPAL PLACE OF BUSINESS Suite 19.01, Level 19, The Gardens North Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur, Malaysia Tel : 603-2685 6800 Fax : 603-2685 6999 STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad DATE OF LISTING 9 July 2002 CATEGORY Sector : Energy Sub-Sector : Energy Infrastructure, Equipment & Services STOCK CODE 5142 STOCK NAME WASCO
WASCO BERHAD 10 2024 KEY PERFORMANCE HIGHLIGHTS Revenue RM3.2 billion FY2023: RM2.6 billion Net Profit RM164.5 million FY2023: RM154.8 million Profit Before Tax RM221.1 million FY2023: RM218.3 million FINANCIAL PERFORMANCE SUSTAINABILITY PERFORMANCE BUSINESS PERFORMANCE Recognised as one of the region’s Top 500 companies in the 2024 Fortune 500 Southeast Asia list. Recorded a Lost Time Incident Rate (“LTIR”) of 0.05 for the year, well below the industry average of 0.24, in line with the Group’s target of maintaining 0 LTIR. A cumulative total of 1,764 turbine units have been sold over the years, creating sustained opportunities for Bioenergy Services through after-sales support. Successfully completed the 300th module at the Engineering and Fabrication Services facility in Batam, underscoring a strong commitment to quality, efficiency, and project delivery excellence. Inclusion in the FTSE4Good Bursa Malaysia (“F4GBM”) and FTSE4Good Bursa Malaysia Syariah (“F4GBMS”) indices underscore our commitment to high standards of environmental, social, and governance (“ESG”) practices. Launched ASEAN’s first Sustainable & Transition Finance Framework, supported by our inaugural USD25.0 million sustainability-linked loan.
11 Overview of Wasco Berhad INTEGRATED ANNUAL REPORT 2024 Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information 2024 KEY PERFORMANCE HIGHLIGHTS Successful expansion of coating facilities in Hartlepool, United Kingdom with the recent installation and commissioning of a new concrete coating facility. Secured a double win at The Edge Malaysia ESG Awards 2024, taking home Silver for Best Performer in the Energy Sector and Silver for Most Improved ESG Performance Over the Past Three Years (RM800 Million - RM5 Billion Market Capitalisation Category) Zero workplace fatalities Thermal Insulation System Plant in Tanzania commenced 24-hour, six-day-a-week operations, boosting efficiency, productivity, and project execution to meet rising industry demand. Engineering and Fabrication Services awarded the prestigious SMK3 Gold Certification by Indonesia’s Ministry of Manpower, recognising its stringent safety protocols and strong commitment to workplace safety. Joined the UN Global Compact Network Malaysia & Brunei to advance human rights, promote fair labour practices, protect the environment, and combat corruption. A total of 11,936 beneficiaries were reached through Wasco’s social impact programmes. A total of RM777,578 was invested in community initiatives. A total of 11,779 volunteer man-hours were contributed in 2024. Successfully maintained the MS ISO 37001:2016 Anti-Bribery Management System (“ABMS”) certification. Total rainwater harvested in 2024 amounted to 11,187 m3
WASCO BERHAD 12 GIAN CARLO MACCAGNO Managing Director/Group Chief Executive Officer CHAIRMAN AND MANAGING DIRECTOR/ GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT DEAR VALUED SHAREHOLDERS, Navigating a Challenging Energy Landscape The year 2024 was one of significant momentum for Wasco. Despite a global economy expanding by just 3.2%1 — slightly below historical trends and the energy industry in a transition mode, our performance stood out, driven by focused strategy and a deep commitment to long-term value creation. While trade tensions and geopolitical uncertainties persisted, they catalysed structural shifts, opening new corridors of opportunity in new markets. The energy sector remained a core pillar of global infrastructure development. More than 233,000 km2 of new trunk oil and gas pipelines are forecast to come online by 2030, ensuring continued demand for one of our core services: pipeline coatings. Concurrently, the clean energy transition is moving ahead, with annual investments expected to reach USD4 trillion3 by decade’s end. These parallel forces—conventional energy expansion and the shift toward low-carbon alternatives—form the foundation of Wasco’s strategic direction. In Asia-Pacific, the Middle East, and Europe, pipeline projects are surging. Southeast Asia’s GDP growth of 5.2%4 bolstered demand for sustainable solutions, including waste-to-energy systems and biomass boilers. We were well-positioned to capture these tailwinds, owing to deliberate investments in capacity, innovation, and market presence. Revenue RM3.2 Billion 11.9% based on adjusted revenue of RM2.9 billion PATMI RM153.0 million 41.2% year-on-year RAISING THE BAR: STRENGTHENING PERFORMANCE, EXPANDING GLOBAL IMPACT
13 INTEGRATED ANNUAL REPORT 2024 Overview of Wasco Berhad Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information CHAIRMAN AND MANAGING DIRECTOR/ GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT DATO’ SERI ROBERT TAN CHUNG MENG Chairman Raising the Bar: A Year of Transformation Against this backdrop, 2024 was a breakthrough year for Wasco. We delivered our strongest financial performance to date, with total revenue of RM3.2 billion. Adjusted revenue excluding trading business grew by 11.9% to RM2.9 billion, and PATMI increasing 41.2% to RM153.0 million. These outcomes reflect our focus on disciplined execution, operational excellence, and a firm commitment to advancing our strategic priorities while delivering sustained value for shareholders. In 2024, we coated over 1,000 km of pipelines, supporting strategic global energy projects such as Qatar’s critical North Field Expansion—one of the world’s largest gas developments, Rosmari Marjoram—one of the largest offshore pipeline and Petronas’ flagship Kasawari CCS Project, marking a significant milestone toward Malaysia’s decarbonisation goals. Our Engineering & Fabrication Services team achieved important milestones this year, successfully completing our 300th module delivery, which included early completion of the Angola FPSO project and securing our largest-ever engineering and fabrication contract, valued at USD150.0 million, reaffirming the industry confidence in our capability to deliver complex, high-value projects. In the United Kingdom, in addition to our existing anti-corrosion facilities, our new concrete coating plant is now fully operational and strategically positions us for future pipeline coating projects in the region, including those related to carbon capture. Expanding our global impact, we also made substantial progress at our key fabrication hubs in Southeast Asia and the Middle East. In Batam, we continued to expand fabrication facilities to complement our EPC capabilities with the expansion of our quayside infrastructure — effectively doubling our loadout capacity to 10,000 metric tonnes to support the delivery of larger, more complex modules for both offshore and onshore energy developments. Spanning 36.7 hectares, the facility is equipped with over 19,000 m² of fabrication shops, a 2,160 m² exotic alloy pipe workshop, and 4,100 m² of covered blasting and painting space, reinforcing its role as a key execution hub within our global operations. To increase the value proposition to our clients, we are investing in a 100-metre jetty extension (targeted for completion by Q2 2025), robotic cutting technology (Q4 2025), and a utility upgrade to increase power supply from 4MW to 8MW (Q3 2025). Strategically located within a Free Trade Zone (“FTZ”) and just 40 kilometres from the nearest international airport, the Batam yard offers operational agility and cost efficiency, positioning us to capture emerging opportunities across regional and global energy markets.
WASCO BERHAD 14 Our facility in Dubai, located in the Jebel Ali Free Zone North—one of the region’s most strategic logistics hubs—complements our Southeast Asian operations. Spanning 25,000 m2, with 8,177 m2 of covered area, the facility is equipped with multiple fabrication bays, a multipurpose covered workshop, blasting and painting sheds, and ample open space for assembly. The yard is capable of delivering up to 10,000 metric tonnes of modular fabrication and pressure vessel manufacturing annually. Its proximity to the Jebel Ali Seaport, combined with its FTZ status, offers logistical and cost advantages, particularly for heavy loadouts destined for regional and international projects. The facility reflects our continued investment in operational excellence and our readiness to serve the growing demand for modular solutions across the Middle East and beyond. Our Bioenergy Services division ended 2024 with a strong backlog of RM259.2 million—one of the highest order book levels to date. This significant pipeline reflects robust market demand and enhanced revenue visibility, driven by global momentum toward decarbonisation and sustainable energy solutions. With increasing demand for biomass boilers and waste-toenergy systems that support Scope 1 emissions reduction, the division is well-positioned to scale and capture emerging opportunities across the region. Backed by a proven track record and growing market relevance, our Bioenergy business has reached a level of maturity that supports strategic optionality, including potential capital market access. This aligns with our broader ambition to unlock long-term value and position the division as a leading player in the renewable energy sector. Strengthening Market Visibility and Industry Engagement Our visibility in the broader energy market significantly grew through active participation at major industry events, including the Abu Dhabi International Petroleum Exhibition & Conference (“ADIPEC”) 2024 and Offshore Technology Conference (“OTC”) Asia 2024. Such platforms have reinforced Wasco’s global brand presence, facilitated valuable industry dialogue, and opened new opportunities for partnerships and project engagements worldwide. Rewarding Shareholders and Strengthening Investor Relations To reward shareholders for their continued confidence, on 28 February 2025, we declared a 2 sen dividend per share—the first since 2020. This dividend reflects prudent financial management during uncertain times, enabling strategic reinvestments to secure sustainable growth in future. We plan to retain adequate resources for the future growth of the Group while at the same time, reward our shareholders for their support through dividend payments. We will aim at achieving a good balance between efficient capital management and appropriate shareholders’ participation in the success of the Group through dividends. Our active Investor Relations strategy further underscores our commitment to transparency and stakeholder engagement. In June, we successfully hosted our inaugural Investor Day, themed “Navigating the Future of Energy,” attracting over 100 investors and analysts. This event, which we intend to hold biennially, complements our ongoing participation in dedicated investor conferences, ensuring consistent communication, market visibility, and sustained investor confidence. CHAIRMAN AND MANAGING DIRECTOR/ GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT MD/GCEO engagement session with investors and analysts during Wasco Investor Day 2024.
15 INTEGRATED ANNUAL REPORT 2024 Overview of Wasco Berhad Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information Our Bioenergy Services division ended 2024 with a strong backlog of RM259.2 million—one of the highest order book levels to date. This significant pipeline reflects robust market demand and enhanced revenue visibility, driven by global momentum toward decarbonisation and sustainable energy solutions. Strategic Clarity for the Future The past year cemented Wasco’s transformation from a diversified group into a dedicated energy infrastructure specialist. Recognising our historical reliance on the oil and gas sector as a key challenge, we intensified efforts to diversify within the broader energy industry, proactively expanding our presence in energy transition and renewable solutions. This strategic direction, anchored in pipeline coatings, modular fabrication, and bioenergy, ensures resilience amid industry shifts. Our order book stood at RM2.5 billion at year-end, supported by robust demand and improved visibility across our business units. Our regional presence in Southeast Asia, the Middle East, Europe, and Africa further reinforces this resilience. Significant progress was achieved in digital transformation, with enhancements to our Health, Safety and Environment (“HSE”) and ESG dashboards, Industry 4.0 adoption, and embedding analytics into core systems. Long-term investments in Enterprise Resource Planning (“ERP”) systems, automation, and advanced business applications laid a robust foundation for integrating sustainability, governance, and social responsibility throughout our organisation. CHAIRMAN AND MANAGING DIRECTOR/ GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT While we remain consciously optimistic about the energy sector we are serving, the geopolitical and geoeconomic implications of ongoing tariffs and counter-tariffs remain uncertain. At the time of writing, the global business environment is becoming increasingly unpredictable. In light of this, we are committed to staying vigilant and ready to adapt swiftly to any changes that may arise. We believe that one of the key goals of our transformation strategy—to strengthen our balance sheet and reinforce financial discipline—has positioned Wasco more robustly to withstand adverse market conditions and unexpected business shifts. Staff engagement session with the senior leadership during Wasco Townhall 2024.
WASCO BERHAD 16 Sustainability as a Strategic Driver Our position in the energy transition strengthened significantly through the launch of ASEAN’s first Sustainable & Transition Finance Framework (“STFF”) and securing a USD25.0 million sustainability-linked loan. These achievements align with our commitment to responsible financing and sustainable business growth. Our approach remains grounded in globally recognised principles—underscoring our alignment with all 17 United Nations Sustainable Development Goals (“UNSDGs”) and our commitment to ethical governance. In December, we voluntarily joined the United Nations Global Compact Network Malaysia & Brunei (“UNGCMYB”), and have since begun CHAIRMAN AND MANAGING DIRECTOR/ GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT embedding the Ten Principles into our operations. This strategic step reinforces our governance framework and reflects our focus on long-term, sustainable value creation for our shareholders. Our ESG performance continued to gain recognition. We maintained our inclusion in the FTSE4Good Bursa Malaysia and FTSE4Good Bursa Malaysia Syariah indices, affirming our progress in transparency and sustainability standards. At The Edge ESG Awards 2024, we were honoured with two silver accolades —for Best Performer in the Energy Sector and Most Improved ESG Performance Over the Past Three Years (RM800 Million - RM5 Billion Market Capitalisation Category). Our inclusion in the 2024 Fortune 500 Southeast Asia list further validated our strategic focus and growing investor confidence globally. Volunteers including MD/GCEO joining Wasco Forest’s tree-planting programme.
17 INTEGRATED ANNUAL REPORT 2024 Overview of Wasco Berhad Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information CHAIRMAN AND MANAGING DIRECTOR/ GROUP CHIEF EXECUTIVE OFFICER’S STATEMENT In Closing Reflecting on this journey, we are personally inspired by the dedication, resilience, and passion our teams have demonstrated across the globe. Behind every achievement is the talent, collaboration, and unwavering commitment of our people, who continually inspire us. With clarity of direction, operational excellence, and a deep sense of responsibility toward our stakeholders, we build toward a stronger, more sustainable Wasco. Shareholders can look forward to improved dividend distributions and unlocking greater value from our businesses, facilitating expansion and capturing exciting growth opportunities ahead. To our employees, clients, investors, and partners—thank you for your steadfast support. As we turn to 2025, we carry forward valuable lessons, sustained momentum, and the belief that Wasco’s greatest chapters are yet to be written. Dato’ Seri Robert Tan Chung Meng Chairman Wasco Berhad Gian Carlo Maccagno Managing Director/ Group Chief Executive Officer Wasco Berhad Employee Engagement: Driving a HighPerformance and Inclusive Workplace At Wasco, we recognise that our people are the driving force behind our success. In 2024, we exhibited our commitment to employee engagement through enhanced global mobility programmes, talent development initiatives, and inclusion efforts as we laboured to foster a dynamic and high-performance workplace culture. To promote career growth and crossborder collaboration, we expanded our global mobility framework, enabling employees to gain international exposure and develop critical skills in key markets. Our other talent development initiatives include structured leadership training, upskilling programmes, and mentorship opportunities, all of which equip our workforce with the expertise required to navigate the dynamic energy landscape. In line with our commitment to diversity, equity, and inclusion, we introduced targeted initiatives to promote a more inclusive work environment, ensuring equal opportunities for all employees regardless of their background, gender, or experience. Wasco bagging double win at The Edge ESG Awards 2024. 1 At the point of writing, global economic growth is expected to stay below pre-pandemic trends, despite showing remarkable resilience, with growth projected at 2.8% in 2025, the same as in 2024. ² Source: GlobalData, Pipelines Database, August 2024. Proprietary report. ³ Source: International Energy Agency, Net Zero by 2050: A Roadmap for the Global Energy Sector, 2021. Available at: https://www.iea.org/reports/ net-zero-by-2050 4 Source: Reccessary, ASEAN Renewable Energy Growth Faces Hurdles Despite Climate Urgency, 6 February 2025. Available at: https://www. reccessary.com/en/research/asean-renewableenergy-growth
WASCO BERHAD 18 CHIEF FINANCIAL OFFICER’S REVIEW It is an honour to connect with you as we reflect on Wasco’s continued financial resilience and robustness in the evolving energy sector. Over the past few years, we have focused on strengthening our balance sheet, ensuring financial stability, and enhancing our ability to navigate industry shifts. Through prudent capital management, cost optimisation, disciplined investment decisions and strategic divestments, we have built a solid foundation that positions us well for sustainable growth. Embracing Change: Innovation and Sustainable Growth The energy industry is undergoing a profound transformation, driven by technological advancements, regulatory shifts, and an increasing commitment to sustainability. As the sector adapts to these changes, Wasco remains proactive in seizing new opportunities, refining our strategies, and leveraging innovation to enhance resilience. Our focus on financial strength, operational efficiency, and strategic investments enables us to capitalise on emerging trends while ensuring long-term profitability. We continue to embrace digitalisation and energy transition initiatives to drive efficiency and expand our market presence. Through these efforts, we are committed to delivering sustainable value for our stakeholders, reinforcing our role as a trusted leader in the energy sector. Robust Profitability We are thrilled to have delivered a stellar performance in FY2024, with the Group comfortably surpassing our FY2023 results and exceeding analysts’ consensus. Our Profit After Tax and Minority Interest (“PATMI”) surged by 41.2% in 2024 to RM153.0 million, despite recognising net one-off charges amounting to RM29.1 million, a record high for the Group. This outstanding achievement was primarily driven by higher revenue contributions with improved margins, alongside profit contributions from joint ventures. The successful execution of high-value projects across the energy and renewable energy sectors further solidified our position as a leader in sustainable and value-driven solutions. Net Borrowings RM173.0 million 2023: RM292.6 million Net Gearing Ratio 0.21x 2023: 0.48x PATMI RM153.0 million 2023: RM108.4 million Return on Capital Employed 20.6% 2023: 24.0% EBITDA RM348.2 million 2023: RM350.0 million
19 INTEGRATED ANNUAL REPORT 2024 Overview of Wasco Berhad Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information CHIEF FINANCIAL OFFICER’S REVIEW Our core profits stood at RM182.1 million, markedly exceeding the full-year consensus of RM144.0 million, and we improved both our Return on Equity and Return on Capital Employed, reinforcing our dedication to sustainable growth and shareholder value creation. In light of the achievements above, for the fiscal year 2024, the Group announced and distributed dividends of 2 sen per share, amounting to a total of approximately RM15.5 million. It is noteworthy that the previous dividend payment occurred in fiscal year 2020, subsequently, we concentrated on strengthening our financial foundations. Strategic Revenue Growth & Business Restructuring In FY2024, our revenue recorded a high of RM3.2 billion, including approximately RM269.9 million from our trading business (previously categorised as “Asset Held for Sale”). After eliminating the contribution from our trading business, our adjusted revenue of RM2.9 billion was a respectable 11.9% higher compared to FY2023. This increase was primarily driven by a surge in project execution activities during the year, despite both domestic and global economic uncertainties and industry challenges. RAMANATHAN SINGARAM Chief Financial Officer 2024 2023 2022 2021 2020 Gross Profit (“GP”) maintained upward momentum, rising to RM552.2 million in FY2024—a robust 23.9% increase from RM445.8 million in FY2023. Excluding the revenue contribution from our trading business, our GP margin of 18.9% is slightly higher than in FY2023. 3,500 3,000 2,500 2,000 1,500 1,000 500 0 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2,915* 2,606 2,366 1,429 1,409 Note: * excluding contribution from trading business Revenue (RM million) GP Margins 18% 17% 15% 5 Year CAGR = 20% 12% 13%
WASCO BERHAD 20 CHIEF FINANCIAL OFFICER’S REVIEW Exit of Trading Business In line with the Group’s business rationalisation strategy, the Group had decided to exit the trading business. This involved the divestment of WDG Resources Sdn. Bhd. (“WDG”) and Syn Tai Hung Trading Sdn. Bhd. (“STHT”), with active efforts to secure buyers for both entities. By 30 June 2024, the Group entered into an agreement for the disposal of WDG through the sale of 1,200,000 ordinary shares and 4,800,000 redeemable preference shares, representing 60% and 80% ownership, respectively, for a total consideration of approximately RM731,000. This disposal resulted in WDG and its subsidiaries ceasing to be part of the Group’s operations. WDG remained classified under discontinued operations in the Condensed Consolidated Statement of Profit or Loss of the Group for part of the year. For STHT, despite efforts to identify a suitable buyer, no viable offers were received. Consequently, in November 2024, the Group opted to proceed with the liquidation of STHT instead of disposal. Therefore, for the financial year ended 31 December 2024, STHT was reclassified under continuing operations. Sustained Profitability & Business Growth 2024 2023 2022 2021 2020 PATMI/(LATMI) (RM million) PBT/(LBT) (RM million) 153.0 108.4 (6.3) (107.5) (295.1) (100.3) (268.0) 221.1 218.3 74.9
21 INTEGRATED ANNUAL REPORT 2024 Overview of Wasco Berhad Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information CHIEF FINANCIAL OFFICER’S REVIEW Over the five-year period, the Group’s profitability also underwent a significant turnaround. In FY2024, the Group recorded a Profit Before Taxation (“PBT”) and PATMI of RM221.1 million and RM153.0 million, respectively, a testament to our resilience and effective business strategies, as we increased our exposure into other areas within the energy sector. Energy Services Our Energy Services division achieved strong growth, with revenue increasing 12.6% to RM2.6 billion from RM2.3 billion in FY2023, driven by a surge in project activities. Key milestones for our Pipeline Services unit include the completion of 570 kilometres of pipeline coating for Qatar’s North Field Expansion Project and 139 kilometres of coated pipelines for Malaysia’s Kasawari CCS Project, supporting national decarbonisation efforts. Additionally, 220 kilometres of pipelines were coated for the Rosmari-Marjoram Project, enhancing regional gas production. Our Engineering & Fabrication Services unit reached a significant milestone with the 300th module loadout from Batam, successfully delivering ahead of schedule for the Angola FPSO project. Additionally, some notable projects secured by our Engineering & Fabrication Services unit include a substation project in the Middle East, Engineering, Procurement, Construction and Commissioning (“EPCC”) for power generation assets in Australia, and EPCC and maintenance of gas compression units in Indonesia. All of this further bolster the Group’s market expansion strategy and strengthens its position as a trusted industry leader. Bioenergy Services Our Bioenergy Services division recorded revenue of RM276.7 million, a slight decline from the previous year due to softer demand. This is in line with the natural plantation cycle, which had followed an exceptional year in 2023. Despite this, the division remains resilient, with contributions from after-sales services growing from 28% to 34% in 2024. To date, it has successfully sold a total of 1,764 turbine units, unlocking significant opportunities for growth through its expanding aftersales services. Additionally, it is worth noting that the division is also looking to strategically invest in the growing industrial boiler segment to support corporate decarbonisation efforts and capitalise on the industrial sector’s gradual transition toward cleaner energy solutions. Cost Management & Financial Efficiency As mentioned, the Group had recorded, excluding the trading business, an adjusted revenue of RM2.9 billion in FY2024, an increase of 11.9% from the prior year. Nonetheless, the increase in revenue did not directly align with the percentage increase in PBT, largely due to the net one-off charges totalling approximately RM29.1 million for the fiscal year. Excluding these, the Group would have reported a PBT of RM250.2 million for FY2024, reflecting robust growth of 14.6%, which was higher compared to the Group’s adjusted revenue. Finance costs saw a more modest decline of only 10.4%, despite total debt reduction by 25.2%. This disparity is primarily attributed to two key factors. Firstly, a significant portion of the Group’s loans are denominated in USD, which carries a higher interest rate. Secondly, loan repayments were made progressively throughout the year. Consequently, the reduction in the Group’s total debt did not translate into a proportional decrease in finance costs.
WASCO BERHAD 22 CHIEF FINANCIAL OFFICER’S REVIEW Balance Sheet and Capital Allocation The Group achieved a notable reduction in total debt attributed to our strong operating cash flow. The Group repaid net debt of approximately RM221.9 million over the year. This reduced the Group’s net gearing to RM173.0 million as of December 2024, improving our net gearing ratio significantly from 0.48x in 2023 to 0.21x. Naturally, our cash and bank balances decreased to RM352.5 million as of FY2024, from RM410.3 million in the prior year. This proactive capital management approach aims to lower interest expenses and provide greater financial flexibility for our future needs. Additionally, it mitigates the risk of financial strain under adverse economic conditions, enhancing our financial resilience. As a result, the Group now enjoys stronger financial control, strength, and flexibility. Capital Expenditure (“CAPEX”) for FY2024 saw the Group maintain a similar level of spending compared to the previous year. CAPEX was incurred primarily for the upgrading of our Engineering and Fabrication yard in Batam, Indonesia, and the acquisition of additional plant and machinery assets for our Qatar and UK plants. Looking ahead, the Group does not expect CAPEX for 2025 to deviate significantly vis-à-vis 2024. Equity Market In 2024, despite global headwinds such as potential US trade tariffs and policies that raised fears of supply chain disruptions negatively impacting emerging market equities, the Malaysian capital market remained resilient and orderly without any observed systemic stability concerns. The Securities Commission reported that the Malaysian capital market hit an all-time high of RM4.2 trillion in 2024 (2023: RM3.8 trillion), driven by the growth in stock market capitalisation and bonds and sukuk outstanding.1 0.21 0.48 0.79 0.87 0.91 2024 2023 2022 2021 2020 Net Gearing Ratio (x) 12.00 10.00 8.00 6.00 4.00 2.00 - 1.80 1.60 1.40 1.20 1.00 0.80 0.60 0.40 0.20 - 02-Jan-24 23-Jan-24 13-Feb-24 05-Mar-24 26-Mar-24 16-Apr-24 07-May-24 28-May-24 18-Jun-24 09-Jul-24 30-Jul-24 20-Aug-24 10-Sep-24 10-Oct-24 22-Oct-24 12-Nov-24 03-Dec-24 24-Dec-24 Price Volume Price (RM) Volume (m) Share Price Movement and Volume Traded Period: 2 January 2024 to 31 December 20242
23 INTEGRATED ANNUAL REPORT 2024 Overview of Wasco Berhad Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information CHIEF FINANCIAL OFFICER’S REVIEW Economic Outlook At the point of writing, global economic growth is expected to stay below pre-pandemic trends, despite showing remarkable resilience, with growth projected at 2.8% in 2025, the same as in 2024. According to Bank Negara Malaysia, Malaysia capped off a positive year with the economy recording 5.1% growth in 2024, well ahead of 3.7% growth attained in 2023. This growth momentum is expected to be sustained in the near term, with growth projected at 4.7% in 2025.4 In conclusion, as the global economy continues its recovery, 2025 is expected to bring moderate growth, supported by easing inflationary pressures. However, the business landscape will require careful navigation amid ongoing recalibrations across geopolitical, economic, and technological fronts. In this dynamic environment, the Group remains committed to executing its strategic initiatives that drive long-term value creation. Ramanathan Singaram Chief Financial Officer Wasco Berhad Wasco’s share price was actively traded and rallied during the second quarter to a high of RM1.57 from RM1.00 at the beginning of the year. We believe that this has coincided with the series of commendable result announcements for Q4 FY2023 and Q1 FY2024. However, the second half of the year had seen our share price shedding the gains, suffering a similar fate with other energy counters on Bursa Malaysia, closing the year at RM1.02. Wasco’s stock is covered by 6 research houses, and as at 3 March 2025, we have 5 BUY calls and 1 HOLD call, with an average 12-month consensus target price of RM1.77.3 Analyst Coverage Hold 14% Buy 86% 1 Source: Securities Commission Malaysia, Annual Report 2024 – Capital Market Review, published March 2025. Available at: https://www.sc.com. my/resources/publications-and-research/sc-annual-report-2024 2 Source: Investing.com, Wah Seong Corporation Bhd Historical Data, accessed April 2025. Available at: https://www.investing.com/equities/wahseong-corporation-bhd-historical-data 3 Source: Wasco Berhad Investor Relations, based on respective research analyst coverage. 4 Source: Bank Negara Malaysia, Economic and Monetary Review 2024, published March 2025. Available at: https://www.bnm.gov.my/publications/ emr2024
2020 2021 2022 (Represented) 2023 2024 OPERATING RESULTS Revenue RM’000 1,409,107 1,429,311 2,366,081 2,605,688 3,184,522 EBITDA/(LBITDA) RM’000 (118,078) 72,356 205,720 350,037 348,241 Profit/(Loss) before tax RM’000 (268,024) (100,341) 74,883 218,256 221,059 Net profit/(loss) RM’000 (306,702) (111,949) 43,130 154,828 166,320 Net profit/(loss) attributable to owners of the Company RM’000 (295,149) (107,484) (6,300) 108,402 153,045 Basic earnings/(loss) per share sen (38.17) (13.88) (0.81) 14.00 19.77 Gross dividend per share sen 1.00 - - - 2.00 KEY BALANCE SHEET DATA Total assets RM’000 2,267,822 2,231,441 2,713,450 2,946,650 2,889,641 Capital and reserves attributable to owners of the Company RM’000 703,725 588,503 579,994 704,806 842,830 Net assets per share RM 0.91 0.76 0.75 0.91 1.09 PROFITABILITY RATIOS Return on total assets % (10) (3) 4 9 9 Return on capital employed % (26) (9) 11 24 21 GEARING RATIO Net debt to capital and reserves attributable to owners of the Company Times 0.91 0.87 0.79 0.48 0.21 FINANCIAL HIGHLIGHTS WASCO BERHAD 24
25 INTEGRATED ANNUAL REPORT 2024 Overview of Wasco Berhad Key Messages Value Creation Commitment to Governance Sustainability Journey Financial Statements Other Information REVENUE (RM’000) TOTAL ASSETS (RM’000) EBITDA/(LBITDA) (RM’000) NET ASSETS PER SHARE (sen) FINANCIAL HIGHLIGHTS 2020 1,409,107 2022 2,366,081 2021 1,429,311 2023 2,605,688 2024 3,184,522 2020 2,267,822 2022 2,713,450 2021 2,231,441 2023 2,946,650 2024 2,889,641 2020 2022 2021 2023 2024 2020 (118,078) 2022 205,720 2021 72,356 2023 350,037 2024 348,241 0.91 0.75 0.76 0.91 1.09
WASCO BERHAD 26 VALUE CREATION MODEL INPUTS OUTPUTS AND MEASURABLE IMPACT OUR MATERIALITY MATTERS F Financial Capital Securing funding from capital providers is instrumental in supporting our business operations, augmenting the cash flow derived from both operational and investment sources. • Market Capitalisation as at December 2024: RM790 million H Human Capital Wasco’s unwavering commitment to nurturing a highly skilled regional workforce underscores our dedication to harnessing human capital as a key driver in achieving our corporate objectives. • 5,854 employees across global operations • Workforce comprises more than 46 nationalities M Manufactured Capital Our state-of-the-art facilities, strategically located around the world, highlight our global capabilities and operational excellence. • Advanced pipe coating and manufacturing facilities • Strategically located fabrication yards in Southeast Asia and the Middle East • Ongoing expansion of existing yards and development of additional facilities I Intellectual Capital Our competitive edge in the energy industry is driven by our strong technical expertise and innovation in niche markets, allowing us to adapt swiftly and lead with confidence. • Proven capabilities in pipe coating, spiral welded steel pipes, and offshore corrosion control • EPC and fabrication solutions for energy infrastructure • Market leadership in biomass energy generation technologies S Social & Relationship Capital We prioritise meaningful engagement with stakeholders and local communities, fostering collaboration, inclusivity, and long-term shared success. • Ongoing community investment projects • Focus on enhancing the social well-being of stakeholders N Natural Capital Our sustainability journey is grounded in the responsible management of natural resources and the commitment to reducing our environmental footprint. • Clear pathway to carbon neutrality • Active participation in environmental stewardship initiatives • Initiatives in renewable energy integration and large-scale reforestation projects GUIDING STAR • Deliver sustainable Return on Capital Employed exceeding 20% • Maintain a prudent capital structure with a Debt/EBITDA ratio of less than 3 • Reward our shareholders with dividend payouts • Foster a workplace culture where every employee is actively engaged in ensuring a safe and injury-free environment, reinforcing our commitment to their well-being and our collective success • Set the standard for environmental responsibility, social impact, and ethical governance, positioning ourselves as an industry leader and a model of responsible corporate citizenship • Continuously develop and strengthen our human capital to drive sustainable growth and innovation • Foster an inclusive and engaging workplace where employees are valued, fairly compensated, and empowered to thrive • Cultivate a data-driven culture powered by digital technologies, data, and streamlined processes — enabling us to derive meaningful insights that drive informed and actionable business decisions 1 2 3 4 5 6 7 8 9 10 11 12 Health, Safety and Environment Product Quality Labour Practices Human Rights Waste Management Training & Development Diversity, Equity and Inclusion Business Ethics Risk Management Product Design Business Model Resilience Energy Management PROFIT PEOPLE DIGITAL SUSTAINABILITY SAFETY
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