CHAIRMAN STATEMENT Commentary by Lim Han Weng, Founder & Group Executive Chairman FYE 2022: A YEAR TO REMEMBER In 2021 the Covid-19 pandemic continued to affect countries and communities globally, sparking renewed mobility restrictions late in the year due to the emergence of the new variant. Energy price hikes and supply disruptions have caused broad-based inflation across many economies, which is expected to persist into 2022. The International Monetary Fund forecasts global growth for 2022 to slow down to 4.4% as compared to 5.9% in 2021, and growth may slow down even further due to the geopolitical tensions between Russia and Ukraine, higher inflation due to the rise in energy and commodity prices, prolonged supply chain bottlenecks, financial markets instability and risks of new Covid-19 variants. Nevertheless, we are optimistic that markets will prove their resilience as global health strategies are rolled out, supplydemand imbalances gradually wane and major economies respond with tightening of monetary policies to curb inflationary pressures. After having recovered from the pandemic-triggered oil price collapse, oil prices stabilised and went on an uptrend to breach the USD100 per barrel mark in February 2022. Even though the high oil price encourages activities in the oil & gas sector, the Group is vigilant of the repercussions from high energy prices as the Bureau of Labor Statistics’ Consumer Price Index rose sharply to 7.9%, which is the highest level since January 1982. Going through two oil price downturns in close succession has caused underinvestment in new production and also made oil companies more disciplined on costs, with many lowering their breakeven cost per barrel. These high prices may not be sustained in the long-term, however we believe oil companies will still be able to operate profitably and expand production even if prices should drop. The elevated oil price will also hasten the global push for the next generation of alternative, clean energy technologies. Our renewables and green technologies divisions are well positioned to capitalise on this opportunity. On the offshore production side, we will continue to strengthen our project pipelines and develop our asset portfolio to deliver strong orderbooks and stable cash flows. We are also actively seeking ways to unlock the value of this division to fuel our Group’s growth. Overall, we acknowledge the risk that the uncertain external environment brings to our business – however we have devoted great effort to turning these risks into opportunities and believe our greatest growth is just on the horizon. Yinson has made considerable headway in all our business divisions. We secured two new FPSO projects in Brazil and also expanded our renewables presence with two wind energy projects in Brazil’s Ceará region. Thus, we are pleased to have further anchored our presence in Brazil, and we look forward to contributing to Brazil’s energy industry for the foreseeable future. Our renewables pipeline is now between 3 GW and 5 GW across Latin America, Europe and Asia Pacific region including close to 1.5 GW in the development and consenting phase moving towards ready-to-build status. On the green technologies front, Yinson GreenTech has made good inroads into our goal to build a green energy ecosystem in the areas of marine, mobility and energy. We recently became the majority shareholder of Malaysia’s largest EV charging station network, ChargEV, launched our EV leasing business in Singapore and invested in e-bikes with swappable batteries through the region’s forerunner in this field, Oyika. We’re also active in the autonomous front through our investments in Singapore-based On behalf of the Board, I am pleased to present Yinson’s Annual Report 2022. 2021 was a fruitful year as we achieved one of our strongest financial performances since we were founded, and made significant inroads on our sustainability journey. 13 ANNUAL REPORT 2022 OVERVIEW
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