Chairman's Statement

Dear Valued Shareholders,

On the 29 July 2008, our Company made its debut on the Stock Exchange of the Main Board of Bursa Malaysia Securities Berhad. And on behalf of the Board of Directors of Sealink International Berhad ("the Company") and its subsidiaries ("SIB Group"), it is our greatest pleasure to present the First Annual Report and Audited Financial Statements of our Company for the financial period ended, 31 December 2008 ("FPE 2008"), after its successful listing.

We are pleased to report that despite the trying economic conditions particularly in the last quarter of 2008, for the period 2008, the group performed remarkably well by achieving a profit Before Tax of RM73.8 Million on the back of RM236.3 Million in total revenue. For the Financial period ended 31 December 2008 profit after taxation stood at RM64.3 Million, including excess of fair value of assets and liabilities over the purchase consideration for subsidiaries acquired of RM9.3 million. Excluding the exceptional item of RM9.3 million mentioned above, profit after tax still exceeds the forecast profit of RM50 Million. That translates to a creditable earning of 21 sen per share and a net asset per share of 79 sen. (Earnings per share is based on weighted average, number of ordinary shares in issue)

This healthy growth of SIB Group's revenue and profitability is mainly attributed to the continuous expansion in the robust oil and gas industry and, in particular the provision of offshore vessel chartering services which our Company is involved in.

In the light of the good results and after taking into account the current economic downturn, our Board had recommended final single tier dividend of 4 sen per ordinary of RM0.50 each share for FPE 2008 as a reward to its shareholders. The said proposed final dividend will be subject to the shareholders' approval in the forthcoming Annual General Meeting.

In 2008, the price of global crude oil was volatile and in fact, had breached USD147 per barrel. Since then, it has come down to a level at USD56 per barrel at the time of writing. In Malaysia, output of crude oil and gas is anticipated to continue to rise on the back of expansion and development of new oil and gas fields. Hence, notwithstanding the volatility in oil prices, we maintain our view that industry prospects remain bright in the long term given continued exploration due to the depletion in global reserves. Furthermore, in Malaysia, even with oil price at current levels, it is still viable for the oil majors to continue their planned capital expenditure given the relatively low cost of production.

Under the Ninth Malaysia Plan, the national oil company, PETRONAS plans to invest approximately RM43 billion in the oil and gas industry of which thirty percent (30%) has been planned for the upstream sector. The remaining portion of the investments (in upstream) would be derived from the international oil majors operating in Malaysian waters.

PETRONAS is also continuing its efforts to increase the country's oil reserves by venturing into the deepwater exploration and enhancing the oil recovery rate in existing oil and gas fields. The recent oil and gas discoveries will not only alleviate the depleting natural reserves but also provide brighter prospects for local oil and gas service providers such as SIB.

Despite the current economic downturn, and uncertainty, we believe that the combined effect of a possible global economic recovery in 4Q 2009 and one of the closest compliance with production quota cuts by OPEC members in history would create fundamental support to crude oil prices at sustainable levels.

Therefore, in line with the above, we are cautiously optimistic that the prospects of SIB Group in providing integrated offshore services to the oil and gas industry remain good and positive for the next few years. We expect exploration and production activities in Malaysia, spearheaded by Petronas, to continue for the next few years, especially in deep waters.

Many Malaysian oil and gas players are involved mainly in the production phase of the oil and gas activities and are therefore less affected by the lower crude oil prices. We expect the project flow to continue for the production phase, as Petronas and other oil majors are likely to give priority to projects that are operational with immediate income.

SIB Group is taking further steps to penetrate into new niche markets for its offshore support vessels services, and as such would remain optimistic and upbeat on the future of the oil and gas industry for the years ahead.

However, for the immediate year 2009, we believe that given the current global economic downturn and uncertainty, our Company's financial performance would not be anticipated to be as good a level as that of FPE 2008.

Since SIB's listing on the Bursa Securities on the 29 July 2008, there were no corporate exercises implemented for the period under review.

In achieving our corporate social responsibility, we have undertaken various activities to achieve our objectives in:-

• Awareness of Health, Safety and Environmental performance; and
• Development of Staff.

We have continuously eliminated potential risks of injury or hazards through the findings and recommendations of our Health, Safety and Environmental (HSE) department. Various HSE regulations and procedures have been established and communicated to all staff, business associates and visitors to our site offi ces as our well as operation/maintenance centres.

As for staff development, we have organised various in-house training as well as technical courses for all our staff throughout the period. We believe in growing our own talent and continuously upgrading our talent pool of workforce. Our aim is to attract, train and retain the right people so that they have the ability and drive to achieve competitive advantage and superior competence.

The Board believes in the maintenance of the highest standards of corporate governance practices within the Group as a fundamental part of discharging our responsibilities to protect and maximize shareholders' value and in enhancing the continued business prosperity of the Group. The measures implemented have been highlighted in the Corporate Governance Report in this Annual Report.

During the period, we organised various site visits to our shipyards and to our new vessel launches, analysts' briefings as well as taking part in various investor road shows. This is to establish proactive and timely communication linkages with the investment community such as institutional investors, fund managers, analysts and media on our Company's financial performance and business operations. Our Company's website is also updated on a regular basis to reflect the latest developments and increase public awareness at the same time.

On behalf of the Board, I wish to extend my gratitude and appreciation to our management and staff for their wholehearted commitment and dedication in reinforcing our position as one of the leading intergrated service providers in the oil and gas industry in Malaysia. Their efforts coupled with their high level of competency have indeed resulted in the Group's sterling performance for FPE 2008.

We would also like to take this opportunity to thank our valued institutional and individual shareholders for your confidence and belief in the prospects of the SIB Group, the oil majors who have been supporting us in their upstream and downstream operations over the years, our business associates and principals for their successful collaboration with us in various business operations, our bankers and Governmental Authorities for their vital role in our strategic planning and execution.

Lastly, my special thanks also to my colleagues on the Board of SIB for their invaluable support and guidance throughout the period.