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Extracted from Annual Report 2022

Dear Valued Shareholders,

On behalf of the Board of Directors ("the Board") of Sealink International Berhad ("the Group"), I am pleased to present to you our Annual Report for the financial year ended 31 December 2022 ("FYE 2022"). It has been a year of commendable growth for the Group with our revenue surging by about 72%. Our resilience has enabled us to record improved results this year and the Group successfully secured several long-term charter contracts in FYE 2022. We have successfully navigated the challenging headwinds that dominated the industry for the past three years and are now firmly on course for better days ahead.

Over the past year, the Group has successfully grown our customer base. This is evidenced by the significant growth in operational performance despite the volatile operating climate. Our ship chartering division also benefitted from the rising oil prices and increased demand for offshore support vessels ("OSVs"). As a result, the Group witnessed a surge in utilisation rates and average charter rates, that surpassed its FYE 2021 figures.

Our core business, which supports the oil and gas ("O&G") sector, benefitted from both the surge in exploration and production capital expenditure ("capex") in the O&G sector and the increased activity in the marine sector. As businesses and countries worldwide eased lockdowns and border restrictions following the Covid-19 pandemic moving into the endemic phase, the O&G industry rallied and began to recover. With the O&G sector having strongly rebounded from its decline over the past number of years, we are poised to leverage on our industry experience and credible track record to compete for more charters.

While the oil price and external environment are factors beyond our control, the Group has been building a strong foundation for recovery following the initiatives and strategies we have undertaken which have reshaped and strengthened the Group, coupled with improving economic conditions and recovery in the marine industry.


Based on the recent release of the Petronas Activity Outlook 2023-2025, the activity outlook for Petronas remains positive, in line with the continued recovery that we have seen throughout 2022. Specifically, Petronas mentioned that this is positive for activities relating to repair and maintenance activities required to maintain the integrity of offshore facilities. With this, the demand for OSVs is expected to remain steady going into 2023, especially for vessels supporting drilling and wells projects. It sees higher demand of OSVs in 2023-2025 compared with its previous forecast and this is an opportunity for local players. It is expected that capex spending to continue its upwards trend in 2023, surpassing pre-pandemic levels, on the heels of the massive under-investment throughout the past few years. This will reflect well on shipping sector.

Service providers in the O&G sector are returning to pre-pandemic activity and profitability levels. The better overall performance was driven by pick-ups in offshore O&G activities. This is on the back of stable oil price per barrel that is spurring capex spending among all producers to enhance production levels. (PublicInvest Research)

Going forward, Petronas is guiding a capex spending of RM300 billion for the next five years of 2023 to 2027, representing a 43% increase from the previous five-year period of RM208.5 billion. This will continue spurring growth of O&G activity levels. With anticipated further ramp up in capex by Petronas, we are expecting the upcoming quarters to see continued recovery trajectory in activity levels. There is also room for services players to demand for higher rates amidst tight supply. (Kenanga Research)

Oil prices are expected to remain strong into the future mainly due to the reopening of China coupled with continuing sanctions on Russian O&G supply. As such, capital spending by oil majors is expected to remain steady in the medium to long-term. Thus, we have intensified our efforts in bidding work. We believe that a resilient domestic sector for O&G is here to stay.

As we look forward into 2023, we are confident that not only is the recovery here, but that the demand for OSVs will continue to strengthen throughout this year. Just as encouraging as the acceleration in demand for OSVs is the continued reduction in the available supply of OSVs. The number of OSVs currently available is very limited indicating that the supply of vessels will continue to decline gradually. Accordingly, it is our view that the industry is positioned to benefit from an increase in demand over medium to long term with a slowly shrinking supply of vessels. We believe this imbalance in supply and demand will continue to provide the opportunity for day rate and utilisation to increase.

We trust that the demand for oil services will come back first for the shallow water segments when the recovery comes, as these typically have a lower breakeven cost. This will be beneficial for the Group which has many vessels for shallow water operations.


The Group is principally involved in the business of chartering of marine vessels, shipbuilding and ship repair. The Group builds, owns and operates a diverse fleet of marine support vessels, which serve the global exploration and marine industry.

Our shipyard is located in Kuala Baram, Miri, Sarawak and the workshop in Krokop Miri, Sarawak. Our shipyard delivered its first new build in 1999, a landing craft known as "Sealink Victoria". To-date, our shipyard has constructed in total sixty-eight (68) vessels (including fabrication of two work barges). The Group's shipbuilding division will also continue its emphasis on ship repair. Apart from construction of OSVs, the Group has diversified into the construction of harbour tugs and other non-oil and gas vessels. Armed with technical knowhow and management capabilities, our Group is able to offer a sophisticated array of vessels designed to meet our customers' needs.

Our ship operations are based in Miri, Sarawak with branch offices located in Labuan, Kemaman and Singapore. The shipping division has a fleet of twenty-two (22) vessels providing a broad range of services to the marine sector with the highest standards of safety and technology available in the industry.

Over the years, the Group has established a reputation with a proven track record in both of our core businesses. As a testimony to this, our clientele includes both local and international companies from the United States of America, Australia, China, Latin America, Europe, East Africa, Southeast Asia and the Middle East.

As an integrated service provider, we have full discretion and control over the design specification, quality, cost and timely delivery of our vessels. It also provides us with the flexibility to either "build and sell" or "build and charter" our vessels. Our experienced maintenance team can respond promptly and attend to emergency repairs and where necessary, vessel(s) can be arranged to be up slipped internally at our slipway in Kuala Baram for vessels within the vicinity. This reduces our dependence on other yards and provides our Group with a distinct competitive advantage over the other players in the market.

The Group strives to intensify its efforts and commitment to deliver high value products and services with emphasis on safe operations and to maintain the group's position as one of the leading integrated service providers in the offshore marine services segment.

As a key measure to manage the Group's exposure to the business risks, the Group has continued on the following initiatives which have been reinforced and carried forward to the next financial year:

  • Sustainable cost rationalisation and optimisation of human resources where only critical positions are filled when incumbents leave the Group. Existing personnel are re-deployed within the Group to take on additional responsibilities for better efficiencies without impairing the adequacy of existing internal control system;
  • Closer monitoring of inventory management, where stringent controls have been deployed to account for procurement of goods and of services vis-à-vis existing inventory levels to conserve cash flows and minimise the risk of inventory obsolescence; and
  • Effective cash flow management.

Notwithstanding the challenges faced, the Group has won various contracts from national and international oil majors in Malaysia and abroad. We are still striving for better market reach and branding, with the view of enhancing shareholder value. The ability to win contracts reaffirmed the trust, confidence and support of our esteemed clients. We are now ready to embark on long-term growth plans to further maximise shareholder value given our more efficient capital structure. We remain confident that we should be able to reward our faithful shareholders who have remained steadfast with us throughout this journey.

The Group has been gradually developing a reputation as a responsible and respected operator of O&G assets. This is being achieved by

- Remaining focused on core business whilst protecting our base assets as a source of positive cashflow;
- Delivering strong operational metrics;
- Delivering on our commitments;
- Utilising "best practice" corporate governance principles; and
- Being a responsible corporate citizen.

The objective going forward will be to continue to positively build our business profile, always cognisant of the associated risks and Health, Safety, Security and Environment considerations in all that we do.


Financial results

In FYE 2022, the Group achieved an improvement in operational performance. The Group recorded a revenue of RM65 million, representing a RM27 million or 72% increase as compared FYE 2021. The significant improvement in the revenue was attributable to the higher utilisation of vessels.

Corresponding to the higher revenue, the Group recorded a lower gross loss of RM4 million in FYE 2022 as compared to a gross loss of RM19.8 million in FYE 2021.

Operating loss for FYE 2022 of RM18 million had reduced by RM47 million from the loss of RM65 million recorded in FYE 2021. The lower operating loss was in tandem with higher revenue and utilisation of vessels.

Finance cost had also reduced from RM4.9 million in 2021 to RM4.7 million in 2022 as some loans have been cleared.

Administrative expenses had also reduced from RM19.4 million in 2021 to RM16.5 million in 2022 in line with our cost saving initiatives.

Liquidity and resources

A critical component of the Group's ability to persevere through the global economic, pandemic and industry challenges of the past few years has been our prudent and disciplined financial management. We have further strengthened our liquidity position in 2022, as cash and bank balances increased by more than doubled, based on our cash management strategy. Our optimised cash management strategy also resulted in positive net cash flow from operations. We have significantly improved cash collection from customers through our diligent follow-up. Our positive liquidity position reflects our ability to meet our financial obligations including capex, working capital and debt repayments.

The Group monitors and manages its cash flows effectively and ensures all obligations and funding needs are met as and when they fall due.

We have reduced the Group's term loans significantly from RM28 million in 2021 to about RM19 million (approximately USD 4.3 million) in 2022, a reduction of about 33%. Presently, only one (1) vessel out of our charter fleet of twenty-two (22) is encumbered. This speaks well of the viability of the Group's business despite the challenging conditions in which it operates. At the same time, with reduced gearing the Group will have a stronger balance sheet to take on additional financing to fund expansion when opportunities arise. Despite the loss for the year, there is a surplus in the cash flows generated from operations amounting to about RM3.6 million. Our ability to generate sufficient cash flow from operations to fund debt repayments demonstrates our ability to manage our cash efficiently despite the industry downturn and prolonged pandemic in prior years. This is the cornerstone of our fiscal discipline, where we take an uncompromising view of not taking any unnecessary risks and maintaining positive cash balance. Our conservative management of debt is reflected in our low gearing and effective risk management strategies put us in a positive financial position to compete for jobs and execute them effectively.

Capital Management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholders value. In order to maintain or achieve an optimal capital structure, the Group may adjust the return capital to shareholders, obtain new financing facilities or dispose of assets to reduce borrowings. Management monitors capital based on the Group's gearing ratio. The Group's strategy is to maintain a gearing ratio not exceeding 100%. The gearing ratio is calculated as total loans and borrowings divided by equity capital. The ratio for the Group has improved from 32% in 2021 to 27% in 2022.


The declaration and payment of dividend will depend upon the Company's financial performance, cash requirements and is subject to certain limitations imposed under the Companies Act 2016. Due to the aforesaid losses incurred, the Board does not recommend any dividend for the FYE 2022.

Corporate Social Responsibility

The Group is continuously committed to fulfilling our role as a responsible corporate social citizen. The main focus of our Group on corporate social initiatives are the Workplace, the Environment and the Community, with the view of maintaining a sustainable value for the Group and its shareholders.

Corporate Governance

The Board believes in embedding a culture in the Group that seeks to balance compliance requirements with the need to deliver long-term strategic value to shareholders and stakeholders through performance, predicated on entrepreneurship, control and ownership, and with due consideration towards ethics and integrity. As such, the Board strives to embrace the substance behind the Principles and Recommendations as promulgated by the Malaysian Code on Corporate Governance 2021 and not merely the form.

Apart from the disclosures in the Annual Report, the Group has also established a corporate website at www.asiasealink. com that houses, inter-alia, documentation on the Group's corporate governance practices like the Board Charter, Whistleblower Policy, Code of Conduct/Ethics for Directors and employees of the Group, Corporate Disclosure Policies and Procedures Documents, Sustainability Policy, Gender Diversity Policy, Fit and Proper Policy and Anti-Bribery & Corruption Policy that are useful for investors as well as potential investors to be apprised on how the Board views corporate governance and engagement with investors. The website also provides, amongst others, information deemed pertinent for investors and the public, for example the Company's corporate announcements, financial results and historical chart of the Company's share prices.


The Group expects 2023 to be promising and is positive about its long-term growth. With our history of having successfully navigated through many challenges and economic crisis in the past decades, we continue to believe that there will be sufficient opportunities for us to operate our vessels in this sector for many years to come. Riding on our strong foundation, we are confident that the Group will achieve good results going forward.

The Group is optimistic about its prospects going forward as we expect to achieve better results on the back of rising demand for our vessels as we continue to see strong momentum and demand from customers as reflected in our results for the current year.

We are of the opinion that 2023 could be a bright year for the O&G industry, by and large, mirroring the outlook that Petronas has cast on the prospects of the sector. Aside from the optimism by Petronas, the hopeful outlook on the sector is also underpinned by factors including oil prices remaining elevated at current levels, the expected recovery in investment spending and improved activity levels from oil majors for this year.

Our strategic priorities for 2023 will see us further building our organisational resilience and delivery capability. Our focused efforts over the past few years to build business resilience as we navigated pandemic-related challenges have borne fruit.

The Group will continue leveraging its business model of synergistic solutions to better optimise and bolster the strengths and capabilities of its various business segments. This would be done in tandem with the pursuit of an asset-light strategy, as the Group will also continue transforming its business by disposing of ageing and surplus vessels that have little prospect in securing or servicing contracts. The disposal of vessels plays into a larger goal of optimising vessel fleet utilisation.

We have a proven track record in marine transportation, offshore support services, shipbuilding and ship repair and will proactively focus our efforts on pursuing new opportunities. As we move forward, we will continue to leverage our resources and assets including capacity building, strengthen our operational efficiencies, and implement cost-cutting strategies to ensure long-term sustainable growth.

Vessels not on long-term charter are marketed and secured work primarily from the spot market at better charter rates than the previous 3 to 5 years.

Stepping into 2023, we are aware of the key strengths we can rely on as our growth drivers. Our strong balance sheet and liquidity position, coupled with our long-standing track record and expertise puts us in a better position to capture growth opportunities.

Our financial strategy for the year ahead remains the same – to maintain fiscal discipline, financial prudence and sound financial management. We will continue to focus on maintaining our strong financial position through prudent financial risk management in our project execution as well as on the bidding front. Cost optimisation through cautious spending and resource optimisation also remains our top priority in our financial management strategy.

As we gear up towards achieving further financial success, we will strive to improve profitability, market capitalisation and shareholder returns.

With the pandemic now a thing of the past, we are looking forward to secure more new charters. We have already embarked on initiatives to enhance our bidding competitiveness. These will augment our business and operational resilience and help us deliver projects in line with our customers' needs and expectations. We believe that our focused efforts will drive better results for the Group moving forward.


On behalf of the Board, I wish to express our sincere thanks and appreciation to all our stakeholders, beginning with our shareholders for their steadfast support and belief in the prospects of our Group. To our clients, business partners, associates and principals; for their continuous support, cooperation and faith in our ability to deliver. To our Bankers and the authorities; for their vital role in our strategic planning and execution. To our committed and dedicated Management team; for their hard work, perseverance and tireless efforts in maintaining our position as one of the leading marine OSV providers and shipbuilders in Malaysia.

To our dedicated and loyal employees, thank you for your dedication, relentless efforts and commitment, as one team with our values upheld, and come out of this with more resilience and focus despite the various challenges. We must continuously work hard and stay the course to achieve our goals. Let us maintain our commitment to steer towards greater heights in the future together. It is my sincere hope that Sealink will continue to grow from strength to strength in the coming years and beyond.

Last but not least, special thanks to my fellow Board members for their unwavering support and guidance throughout the financial year. On behalf of the Board, I would like to extend our sincere appreciation to Datuk Sebastian Ting Chiew Yew who retired from the Board at our 14th AGM in May 2022 after serving the Group as an Independent Non-Executive Director for nine (9) years, for his contribution to the Group. I hereby wish to welcome Madam Yong Nyet Yun as the new Chairman of the Audit Committee, following the re-designation of Mr Wong Chie Bin as our Non-Independent Non-Executive Chairman.

Thank you.

Chief Executive Officer cum Managing Director