Board of Directors Report
On behalf of Nakilat’s Board of Directors, it is my distinct pleasure to introduce Nakilat’s 2022 Annual Report.
2022 has been a year marked with major changes and challenges that have reshaped our industry. It has also been a year characterized by the strong financial performance of our company – a direct reflection of Nakilat’s expansion strategy, admirable track-record and its operational excellence in energy transportation and maritime services. The company’s resilience and the convergent efforts of its employees has enabled Nakilat’s sustained growth momentum and business continuity, creating immense value for both its customers and shareholders.
As an increasingly important and strategic element of the global energy supply chain, Nakilat has maintained its track record of delivering clean energy without any interruptions. It has upheld its commitment to providing safe, reliable, and efficient shipping and maritime services globally, continuing its quest to expand and contribute towards its vision to be global leader and provider of choice for energy transportation and maritime services.
Nakilat played a pivotal role in enhancing its contribution to the international maritime industry and maritime trade, when Qatar was elected to the International Maritime Organization (IMO) Council in Category C during the IMO Assembly’s 32nd session in London. The role of the shipping and maritime industry is becoming increasingly accentuated and indispensable; and Nakilat is proud to support Qatar make its mark on the global maritime stage.
With a solid sense of direction from the company’s long-term expansion strategy and opportunities that re-emphasized Nakilat’s importance in achieving its targets, the company has been smoothly sailing towards making significant contributions and notable accomplishments during this year.
Through the recent strategic expansion of Nakilat’s fleet with an additional 4 LNG carriers, and the improved performance of its joint ventures and support services operating in the shipyard, Nakilat has achieved sustainable and long-term growth over the past year, demonstrating our commitment to innovative sustainability and operational excellence. This commitment has provided Nakilat with a greater fleet capacity and increased operational efficiency, providing us with a competitive edge in the LNG shipping sector, as the company expands its international shipping portfolio.
With a fleet strength of 74 vessels, one of the world’s largest Liquefied Natural Gas (LNG) shipping fleet comprising of 69 LNG carriers, 4 LPG carriers and 1 Floating Storage Regasification Unit (FSRU), the company is backbone of the transportation link in Qatar’s LNG supply chain. Our LNG fleet has a combined carrying capacity of over 9 million cubic meters, which is about 10% of the global LNG fleet carrying capacity. Through its dedicated in-house ship management, Nakilat operates 30 vessels, 25 LNG, 4 LPG carriers and 1 FSRU. The majority of Nakilat’s vessels are fixed with long term charters to reputable counterparties, creating a steady and healthy cash flow for the company.
Supported by the world-class Erhama Bin Jaber Al Jalahma Shipyard, Nakilat’s joint venture companies continue adding strategic value to our operations through dedicated services, including ship repair, offshore fabrication, as well as a range of maritime services, all of which contribute towards establishing Qatar as a shipping and maritime hub, in support of Qatar National Vision 2030.
The Board is pleased to highlight achievements of our joint ventures and subsidiaries this year:
- N-KOM, completed 153 repairs for various types of marine vessels and 27 offshore/rig repair projects in 2022.
- NSW achieved 13 million exposure hours LTI free in 2022.
- NAC commemorated 17 years of operations, offering 24/7 shipping, logistics and marine services at all ports and terminals in Qatar. The company provided its services to more than 4000 vessels in 2022, without any service failures or Lost Time Incident (LTI)
- QFAB was awarded the fabrication & assembly of WHP topsides (4nos), sensor tower platforms (2nos) and subsea structures, at the Qatargas North Field Expansion Project (NFXP).
As an organization dedicated to operational excellence, employees and crew safety and welfare are always at the top of Nakilat’s agenda, particularly during the COVID-19 pandemic, through stringent measures and effective procedures to ensure the wellbeing of our staff, whether at the office or onboard our vessels. Additionally, our commitment to crew welfare is underscored through our diverse initiatives and responsiveness.
In line with the United Nations’ Sustainable Development Goals (UN SDGs) and Qatar National Vision 2030, and driven by the pillars of transparency, Nakilat released its first 2020 ESG report outlining the company’s focus areas in health and safety, climate changes and human capital management. The consequent release of Nakilat’s 2021 ESG Report highlights our continuous commitment to sustainable development.
The Board of Directors commends Nakilat for its strong financial performance and operational excellence in 2022. We are pleased to announce Nakilat’s net profit of QAR 1.44 billion for 2022, a 6.3% increase compared to QAR 1.35 billion in 2021. Considering our current financial performance and future business’ growth opportunities over the upcoming years, Nakilat’s Board of Directors is pleased to recommend to the General Assembly to distribute cash dividends of QAR 0.13 per share for the year 2022.
Nakilat’s Board of Directors would like to express its deep 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 of the State of Qatar, for their visionary and inspiring leadership that have enabled Nakilat’s growth into a diversified shipping and maritime services company that significantly contributes towards the development of Qatar’s maritime and shipping sector.
The Board of Directors also offers its appreciation to HE Engineer Saad Sherida Al-Kaabi, Minister of State for Energy affairs, The President and CEO of QatarEnergy for the ongoing support of Nakilat’s activities, including the Industrial Cities and extended cooperation with the Erhama Bin Jaber Al Jalahma Shipyard.
We also extend appreciation to our long-term main Charterer Qatargas for their continued support towards Nakilat’s operations. Finally, we would like to thank Nakilat’s partners, shareholders, management, employees, Qatar Stock Exchange (QSE) and Qatar Financial Markets Authority (QFMA) for their continued dedication and support.
MR. ABDULAZIZ AL-MUFTAH
Chairman of Nakilat Board
EXPLORE THE ANNUAL REPORT
Corporate Strategy
To ensure our focus on arriving at the strategic destination, four strategic themes were defined to serve as the architecture of Nakilat’s strategy map. Three of the themes within the strategy map represent Nakilat’s core activities, with each theme hosting a stream of strategic objectives plotted in an upward relational logic. Nakilat’s strategic themes draw a bigger picture of the company’s direction and portray our story in a concise manner.
Corporate Governance
Corporate governance is described as the systems of rules, practices, and processes by which companies are governed. and ensures that companies follow an appropriate and transparent decision-making process, and that the interests of all stakeholders and shareholders are protected. The company’s board of directors and executive senior management strives to build long-term relationships and commitment among various Nakilat’s stakeholders to meet the company’s goals and objectives, and to stand in support of our sustainable success based on strong principles of governance.
Nakilat believes that adopting best governance practices and standards will enable us to realize transparency, integrity, and trust in our financial statements and thereby enhance the confidence of debtors, lenders, and shareholders in the company, as well as assist investors to make well-informed investment decisions. Nakilat identifies governance as a framework to align the interests of all our stakeholders behind its purpose to unlock the power of delivering clean and reliable energy to enhance quality of life for everyone around the world.
Recognizing the relationship between good governance and sound financial performance, Nakilat strives to adhere to leading and best governance practices and complies with Qatar Financial Markets Authority (QFMA) governance code. Nakilat’s issued governance report has been prepared in compliance with QFMA governance code reflecting Nakilat’s effort to meet all relevant regulatory requirements, and it is shared with all concerned stakeholders and the public on Nakilat’s website.
Operational Highlights
Fleet
- A new state of art vessel (X-DF 174K LNG carrier) has been delivered to Nakilat, as part of its long-term expansion plan and strategy to sustain a strong position within the shipping market.
- In 2022, Nakilat received an exceptional performance feedback from its customers, who are one of its most valued and vital assets
- Introducing healthy positive mental wellbeing initiatives to support establishing a positive environment onboard. New projects are focused on continuity of improvement of conditions for seafarers.
- Training and development of Qatari Seafarers, majority of whom have been promoted to officers with some reaching senior ranks.
Shipyard
- N-KOM completed repairs on 153 vessels such as LNG, LPG, VLCC, Tankers and small vessels
- N-KOM completed repairs on 23 LNG carriers
- N-KOM completed repairs on 27 Offshore structures, Jack up rigs and Industrial Engineering projects
- N-KOM successfully delivered the Outboard Slot (OBS) Module Fabrication project
- N-KOM successfully secured ship repair and offshore projects from 27 new clients in 2022
- QFAB awarded the fabrication & assembly of WHP Topsides for Qatargas North Field Expansion Project (NFXP) – North Field East (4nos), Sensor Tower Platforms (2nos), Subsea Structures and WHP Jackets (5nos)
- QFAB awarded the fabrication & assembly of 2nos. Spent Caustic Treatment Modules for Chemical Engineering & Construction Corporation Seven, Ltd. (CC7)
- N-KOM supported QFAB through the provision of prefabrication services for QFAB’s ongoing NFXP & NFS projects underlining QFAB’s commitment to In-Country Value (ICV) and greater yard utilisation
- QFAB achieved the milestone of 1 million work hours without a Lost Time Injury (LTI), reiterating the company’s commitment to safety
Marine Services
- NAC commemorated 17 years of operations, offering 24/7 agency services to 64,000 vessels without any service failures and Lost Time Incidents (LTIs)
- NAC considered an integral organization at Ras Laffan port to continue the flow of operations during the pandemic.
- NAC completed 2 years of global agency services through international partnerships providing hub services and attending to more than 2,800 vessel port calls and channel transits globally
- NAC Arranged around 1000 crew movements including medical attendance, ship to ship crew transfers and crew changes in ports of Qatar during the year. This included arranging speedy repatriation of stranded seamen upon lifting of COVID-19 travel restrictions
- NSW surpassed 13 million exposure hours without incurring an LTI for 8 years and 8 months
- NSW Performed a total of 14,044 tug jobs for QatarEnergy at Ras Laffan Port, 6.5% higher than 2021
- NSW continued upholding performance of uninterrupted services with a 99.91% technical up time across the fleet
- NSW received the Platinum Award for outstanding safety performance under Ras Laffan Port’s ‘7 Star Safety Audit
- 3300 orders of various types have been handled by VSU services at Ras Laffan for Nakilat-owned, joint-venture and third-party vessels
- VSU uninterrupted supply and support service from Ras Laffan during the lock down period, that ensured supply of essential items to vessels through VSU
- VSU clearance and delivery of critical spares to Nakilat and JV vessels at Ras Laffan, an average of 350 movements per month
Sustainability at Nakilat
Nakilat and its joint ventures (JVs) are committed to Qatar National Vision 2030, which outlines the development of a sustainable future for the State of Qatar. As an organization, we conduct various safety and internal development programs to ensure the creation of a safe and reliable workforce, while our robust corporate social responsibility (CSR) framework aims to enrich the lives of local communities and preserve our natural environment.
Our sustainability commitment comprises several key elements, and among our highlights this year include:
Safety Excellence
COVID-19 PREVENTIVE MEASURES
- Operations continued with 100 % staff returning to work from office in accordance with MoPH guidelines.
- All employees were appraised of the requirements from MoPH on the latest COVID-19 guidelines and precautionary measures.
- Restrictions on temperature screening and RAT tests were relaxed in a phased manner in consultation with Qatar Energy COVID-19 Crisis Management Committee across all our facilities (HQ, shipyard, employee accommodation, onboard the vessels). Social distancing measures continued to be implemented throughout major parts of the year.
- Post travel RAT Tests and submission of self-declaration before resuming work continued to be implemented throughout the year.
- The Corporate office premises were thoroughly disinfected daily and after a positive case was identified.
- Nakilat ensured that booster doses were administered for eligible personnel throughout all its facilities.
- Extensive precautionary measures were implemented for NAC operations during crew sign on / sign off. Some of the key measures included daily disinfection of vehicles, daily RAT testing for drivers, strict adherence towards wearing of face masks during the transit and provision of PPE / sanitization kits to crew / visitors during signing on to vessels. Operations continued with 100 % staff returning to work from office in accordance with MoPH guidelines.
- Restrictions on temperature screening and RAT tests were relaxed in a phased manner in consultation with Qatar Energy COVID-19 Crisis Management Committee across all our facilities (HQ, shipyard, employee accommodation, onboard the vessels). Social distancing measures continued to be implemented throughout major parts of the year.
- Post travel RAT Tests and submission of self-declaration before resuming work continued to be implemented throughout the year.
- The Corporate office premises were thoroughly disinfected daily and after a positive case was identified.
- Nakilat ensured that booster doses were administered for eligible personnel throughout all its facilities.
- Extensive precautionary measures were implemented for NAC operations during crew sign on / sign off. Some of the key measures included daily disinfection of vehicles, daily RAT testing for drivers, strict adherence towards wearing of face masks during the transit and provision of PPE / sanitization kits to crew / visitors during signing on to vessels.
Human Capital & Capability Development
Professional and personal development of our most strategically important assets, our employees, remained in sharp focus during 2022. Nakilat continued to utilize our blended learning approach with the delivery of 90% of the training programs virtually. This was a result of moving back to a gradual face-to-face approach yet still taking advantage of the less time and budget consuming virtual training but still achieving face-to-face when appropriate. This new strategy continues to significantly improve the efficiency of the training delivery model which gives more flexibility to our staff to complete training at times and locations convenient to them.
11,269 hours of training content was delivered by subject matter experts from external training consultancies as well as internal employees across all divisions.
The Learning Academy, which was established in 2021, continued to be a venue of solid learning in 2022 for Nakilat employees and it provides a variety of over 7,400 courses and materials.
In 2022, we succeeded in getting three (3) cohorts of leaders and high potential individuals through the Georgetown University Leadership Development Program, where Cohort 1 completed the program in Q3 of 2022 and Cohorts 2 and 3 are scheduled to complete the program in Q1 of 2023. The Personal Effectiveness Program in partnership with Franklin Covey came to a successful completion with 845 learning hours.
In 2022, we continued our focus on developing the next level of leaders in our business through our succession planning process, which culminated in phase 2 talent forum for Nakilat.
