Board of Directors Report
I am pleased to introduce Nakilat’s 2020 Annual Report on behalf of Nakilat’s Board of Directors.
This past year has been one unlike any other, with the COVID-19 global pandemic reshaping our definition of normal and creating a new ‘normal’ of living and working. Like the rest of the global shipping and maritime industry, the company has had to navigate unprecedented challenges to its operations.
However, the company’s solid business continuity plans and infrastructure enabled us to swiftly adapt to the situation and allowed us to remain focused on creating value for our shareholders and customers.
Nakilat remained committed in achieving its vision and delivered many noteworthy accomplishments during this challenging year. The company continued to deliver clean energy to worldwide destinations without any interruptions, upholding our commitment to operational excellence and customer satisfaction.
The safe completion of the second phase fleet management transition involving 7 LNG carriers, delivery of a MEGI LNG newbuild, as well as the first FSRU transition to NSQL-management, were all accomplished within less than a year, under trying circumstances and with many restrictions in place. These achievements are no mean feat for any shipping company and bear strong testament to our commitment in maintaining our leadership in energy transportation, while simultaneously supporting the country’s position as the top exporter of clean energy worldwide.
Today, Nakilat stands proud with a fleet strength of 74 vessels, comprising of the world’s largest LNG fleet with 69 LNG carriers, one Floating Storage Regasification Unit (FSRU) and four large LPG carriers. The majority of Nakilat’s vessels are fixed with long-term world-class charterers, generating a steady and healthy cash flow for the company. Through our in-house ship management, Nakilat operates and manages 27 vessels comprising of 22 LNG, four LPG carriers and one FSRU.
Our local joint ventures at the Erhama Bin Jaber Al Jalahma Shipyard continue to contribute towards the development of the energy sector’s supply chain, with the successful completion of a major offshore fabrication project for Qatargas’ North Field Bravo (NFB) project delivered earlier this year. The project bore great significance as it was the first time that a major offshore living quarters structure was fabricated completely at a local yard in the country. This highlighted the company’s capabilities in supporting the increasing demand for the construction of offshore and onshore structures in Qatar, and by extension, the country’s efforts at localization.
Nakilat’s integrated shipping and maritime operations include ship repair, offshore fabrication as well as diverse maritime services, all of which contribute towards developing Qatar as a strategic shipping and maritime hub.
The Board is pleased to highlight achievements of our joint ventures this year:
- N-KOM successfully completed the fabrication of a brand-new offshore living quarters for Qatar Gas’ North Field Brave (NFB) living quarters expansion project
- NSW achieved 10 million exposure hours LTI free
- NAC completed 1 year of global agency services and attended to more than 4,700 vessel calls locally and internationally in 2020
Given the scale and rapid transmission of the COVID-19, health and safety became even more of a priority across all our operations, to safeguard our most vital assets – our people. We spared no effort in ensuring a safe workplace to protect the health of our workforce, by taking various measures to prevent the spread the virus and reduce risks to all our employees, contractors and visitors, be it at the office or onboard our vessels.
Our business continuity preparedness was proven with our ability to remotely work from home while delivering the same level of business excellence, further reinforcing our shareholder and customers’ confidence in the company. Moving forward, the Board of Directors shall continue to demonstrate unwavering commitment towards upholding and implementing the highest standards of corporate governance as well as robust risk management, business continuity preparedness, and various internal measures throughout the organization to secure our employees’ wellbeing as well as the company’s sustainable business growth.
Despite the unique challenges faced by the company, the Board of Directors commends Nakilat for continuing to deliver robust financial performance and sustained operational excellence in 2020. With significant accomplishments achieved this past year, I am pleased to announce that we have achieved a net profit of QR 1,161 million for the year 2020, a 15.7% increase as compared to QR 1,003 million in 2019. As such, Nakilat’s Board of Directors is pleased to recommend the General Assembly to distribute cash dividends equivalent to ‘0.11 Qatari Riyal’ per share for the year 2020.
Nakilat’s Board of Directors would like to express its gratitude to HH Sheikh Tamim Bin Hamad Al Thani, the Emir of the State of Qatar, and to HH Sheikh Hamad Bin Khalifa Al Thani, the Father Emir the State of Qatar, for their wise leadership and vision that has enabled Nakilat’s growth into a diversified shipping and maritime company that significantly contributes towards the development of Qatar’s maritime as well as oil and gas sector.
The Board of Directors also offers its appreciation to HE Engineer Saad Sherida Al-Kaabi, Minister of State for Energy affairs, The President & CEO of Qatar Petroleum (QP) for the ongoing support of Nakilat’s activities, as well as to QP including the industrial cities for the extended cooperation with the Erhama Bin Jaber Al Jalahma Shipyard.
We also extend appreciation to our long-term charterer Qatargas for their continued support towards Nakilat’s operations. Finally, we would like to thank Nakilat’s partners, shareholders, management, employees, Qatar Exchange and Qatar Financial Markets Authority (QFMA) for their continued dedication and support.
HE Dr. Mohammed Bin Saleh Al-Sada
Chairman of Nakilat Board
EXPLORE THE ANNUAL REPORT
Corporate Governance
Nakilat profoundly believes that good corporate governance creates a business environment conducive to long-term growth. Nakilat employs a variety of policies and processes to uphold high ethical standards and promote transparency. Our efforts are underpinned by a board of directors that provides strategic and independent oversight of our corporation’s affairs.
Recognizing the relationship between good governance and sound financial performance, Nakilat strives to adhere to leading governance practices and complies to Qatar Financial Markets Authority (QFMA) governance guidelines. Nakilat governance report has been prepared in compliance with QFMA governance code and its shared with all concerned stakeholders and the public on Nakilat’s website.
Our Board of Directors considers the interests of our shareholders as well as our other stakeholders. We see no contradiction between pursuing our business interests and investing into our long-term sustainability. Engagement with our shareholders through our roadshows, investor meetings and analyst calls has sharpened our focus on our core priorities, strategic vision and governance. We continue to listen to all our shareholders and other stakeholders. We see governance as a framework to align the interests of all our stakeholders behind our purpose to unlock the power of delivering clean and reliable energy to enhance quality of life for everyone around the world.
Operational Highlights
Fleet
- Safe completion of the 2nd Phase Fleet Management Transition involving seven LNG carriers from Shell
- Taking delivery and technical management of a newbuild MEGI LNG carrier “Global Energy”
- Taking over technical management and operations of the company’s first Floating Storage Regasification Unit (FSRU) vessel “Exquisite” from Excelerate Energy
- Ensured smooth crew relief for our seafarers throughout the COVID-19 pandemic
Shipyard
- Completed more than 1,000 repairs for a variety of vessels such as LNG, LPG, VLCC, tankers and small vessels to date
- Completed more than 200 repairs for LNG carriers to date
- Completed 23 projects for BWTS and 5 Scrubbers to date
- Completed more than 140 offshore repairs including 88 rigs, NFB topside fabrication for Qatar Gas and boat landing fabrication for Qatar Petroleum
Marine Services
- NSW performed a total of 13,083 tug jobs for Ras Laffan Port
- Appraised by Ras Laffan Port and Qatar Petroleum (QP) Marine for uninterrupted services throughout the pandemic, maintaining 99.9% up time across its fleet
- Achieved 10 million safe man-hours hours without Lost Time Injury (LTI)
- Surpassed 60,000 COVID-free man-days across NSW since the virus was first discovered in Qatar
- NAC completed 15 years of operations offering 24/7 agency services up to 60,000 vessels without any service failures and lost time incidents (LTI)
- NAC marked 1 year of global agency services in February 2020, attending to more than 1,400 port calls and cannel transits within this period
- NAC arranged around 1,000 crew movements including medical attendance, ship to ship crew transfers and crew changes in ports of Qatar during the year
- Around 200 vessels of various types have utilized VSU services at Ras Laffan, including Nakilat-owned, joint-venture and third-party vessels
- VSU provided uninterrupted supply and support service from Ras Laffan during the lock down period, that ensured supply of essential items to vessels
- VSU facilitated clearance and delivery of critical spares to Nakilat and JV vessels at Ras Laffan, an average of 120 movements per month
Sustainability at Nakilat
Safety Excellence
COVID-19 PREVENTIVE MEASURES
- Ensured smooth operations while maintaining 20% workforce in the office, in accordance with COVID-19 governmental guidelines
- Regular employee communications on the latest COVID-19 guidelines and precautionary measures
- Temperature screening for all employees, contractors and visitors across all our facilities (HQ, shipyard, Employee accommodation, onboard the vessels)
- Face-to-face meetings restriction, encouraging employees to conduct virtual online meetings
- Provision of necessary PPEs and adequate supplies of hand sanitizers are made available at all our working sites
- Regular and thorough disinfection exercise the employees’ accommodations, workshops and all around the workplace areas
- Employee health declaration for all employees and contractors, including pre-embarkation for all seafarers
- Activation of special work arrangement for employees to work from home
- Contact tracing of positive cases and isolation of suspected cases; immediate liaising with Communicable Disease Center (CDC) for conducting COVID-19 tests for all suspected cases
- Personnel movement restriction to essential areas only at the shipyard
- Reinforce social distancing at all times; be it queuing during meal time, boarding transportation, or whilst on the transportation
- Mandatory installation of EHTERAZ application on all employees phones to support the country’s efforts in combating COVID-19
- Organized a Seasonal Influenza Vaccination drive for staff at company HQ
- Held awareness sessions for employees on mental health and coping during COVID-19
Human Capital & Capability Development
Professional and personal development of our most strategically important assets, our employees, remained in sharp focus during 2020. Nakilat continued to utilize our blended learning approach despite the challenges posed by COVID-19, utilizing digital platforms to continue the delivery of our trainings virtually.
Over 4,000 hours of training content was delivered by subject matter experts from across our business during NICE sessions. Innovative new virtual Masterclasses and webinars were also conducted, catering to a wide range of business topics with external training providers both in Qatar and overseas, including Harvard Business School. A new program designed and delivered this year by Nakilat-certified coaches was the ICON coaching program, which consisted of almost 100 virtual hours of one-to-one performance coaching to 13 young Qatari Nationals, in support of their career goals and alignment with our Qatarization strategy. Over 200 courses were delivered virtually during the year, fully utilizing the platforms and technologies at our disposal to ensure continued development of our employees.
Nakilat also welcomed three additional Qatari Nationals to the rank of Officer as Deck Officers (DOOW) and Engineering Officers (EOOW) during 2020, after having successfully completed their academic studies as well as all sea-training time and competence assessments.
In 2020, we continued our focus on developing the next level of leaders in our business through our succession planning process, which culminated in an agreed succession plan for 2021 for Nakilat. Facilitated by the creation of bespoke development plans for each successor, their advancement and growth will be the key focus for 2021, principally with the launch of our extensive and comprehensive Leadership Development Program.
