CEO Message
2020 has been a challenging year for the entire world as we saw the beginning of the COVID-19 health crisis, which grew into a global pandemic impacting industries, economies and countries around the world. Amid the challenging business landscape, Nakilat remained steadfast in executing our strategies safely, sustaining operational efficiencies and ensuring fiscal discipline across all our shipping and maritime operations.
Nakilat continued to demonstrate great resilience, as reflected in our operational and financial performance for the year. Our outstanding financial performance in 2020 is a testament to our concerted efforts, as Nakilat recorded a net profit of QR 1,161 million, a 15.7 % increase against the previous year at QR 1,003 million.
The result of our concerted efforts is clearly tangible from our stellar financial performance in 2019, with a net profit of QR 1,003 million achieved, a 12.4% increase against the previous year at QR 892 million.
In alignment with our growth strategy, Nakilat expanded its international presence with a larger fleet and is preparing to take on greater ship management responsibilities in the coming period, as we steadily consolidate into a fully-fledged shipping and maritime company. The agreement signed with Maran Ventures for four newbuild LNG carriers will not only enhance the capacity of our fleet but will strengthen our vessel management and marketing capabilities for the world’s largest LNG fleet. Furthermore, the full ownership acquisition of four Q-Flex LNG carriers that we currently manage will provide greater operational flexibility and optimization of resources, leading to the realization of cost savings with minimal risks and ultimately, provide greater value to our customers.
Staying true to our mission, Nakilat is always on the lookout for potential partnerships and collaborations that would strengthen our business portfolio and generate positive return for our shareholders. We entered into a strategic partnership, as part of the Energy sector’s “Tawteen” initiative, with McDermott, to form a new joint venture, Qatar Fabrication Company (QFAB). This new venture will not only increase productivity levels at our world-class Erhama Bin Jaber Al Jalahma Shipyard, but also develop local construction capabilities to support the increasing demand for the construction of offshore and onshore structures in Qatar, as the country’s ramps up its liquefied natural gas (LNG) production from 77 to 126 million tonnes per annum in the coming years. In addition, it will facilitate the transfer of knowledge and expertise to the local workforce and contribute towards the creation of a sustainable talent pipeline in Qatar, in alignment with Qatar National Vision 2030.
Our local joint ventures continue to value-add to our maritime operations and contribute towards the establishment of an integrated maritime industry in Qatar. The successful completion of one of the most complex offshore projects undertaken at the Erhama Bin Jaber Al Jalahma Shipyard to date, marked a historical milestone for Nakilat-Keppel Offshore & Marine (N-KOM). Made with pride in Qatar, the 877-tonne topside fabricated by N-KOM is the first and largest to be constructed locally as part of the Bul Hanine Re-development Project for Qatar Petroleum. The safe and timely completion of this major project is an excellent demonstration of our project management team’s capabilities in handling complex, large-scale projects to meet the demands of the local oil and gas industry. Riding on this success, the company looks forward to delivering more large-scale projects that are made with pride in Qatar, for Qatar, to meet the demands of the local oil and gas industry. In addition, construction is in the final stages for Qatargas’ 5,000-tonne NFB living quarters expansion project, due for delivery in early 2020.
A common thread underlying our various operational successes has been our keen attention to safety, health and environmental management, as we strive to provide shipping and maritime services in a safe, reliable and efficient manner. We not only marked a milestone achievement in our fleet operations and management with zero LTIs in 2019, but also secured the prestigious “Sword of Honour” awarded by British Safety Council for the second consecutive year, following a stringent and comprehensive audit process. The accomplishment of such safety milestones not only affirms our high operating standards but is also a reflection of the strong safety culture and ownership amongst our staff and seafarers, and their dedication to create a safe working environment. On this note, I extend my appreciation and heartfelt gratitude to the team for their passionate dedication to safeguard the lives of everyone at our workplace, and the integrity of all our assets and facilities.
Sustainability continues to play a big part in how we conduct our business through our strategic human capital approach. As an employer of choice, our comprehensive development programs and commitment to nurture capable and dedicated leaders for the industry was recognized, with Nakilat wining the ‘Supporting Training & Development’ award at the Energy and Industry Sector’s Annual Qatarization Review Meeting for the third consecutive year.
As a responsible corporate citizen, we conduct an array of activities and campaigns in the spirit of giving back to society and preserving the natural environment, in alignment with the goals of our robust Corporate Social Responsibility framework.
Nakilat remains optimistic that with these solid foundations proven by great accomplishments, the company has gained the growth momentum to propel us forward from good to great in the coming years. The future holds much promise for Nakilat and we are confident in continuing to deliver value for our shareholders while bringing the company to greater heights.
Eng. Abdullah Al-Sulaiti
Chief Executive Officer
EXPLORE THE ANNUAL REPORT
Corporate Governance
Nakilat strives to achieve good corporate governance. Good corporate governance means that the company practices transparent disclosure procedures to give all stakeholders precise information regarding financial, operational and other aspects of the business. One of the main objectives of Corporate Governance is maximizing the returns to all stakeholders through exercising effective guidance on and control over the company’s activities, while maintaining integrity, objectivity and transparency. Nakilat believes that adopting international standards will enable us to realize transparency, integrity, and trust in our financial statements and thereby boost the confidence of debtors and lenders in the company, as well as assist investors make the right investment decisions.
Nakilat believes that applying a good corporate governance framework and principles is essential to assist the company in achieving its goals and objectives. Nakilat’s Board of Directors is committed to the company’s long‑term sustainable value creation based on strong principles of governance, so that the company can continue to deliver constant value over time. The economic value generated through a well-managed and governed enterprise not only benefits shareholders but also local communities through job creation and societal development by means of corporate social responsibility activities.
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.
As guidelines change and governing requirements become more complex, we at Nakilat, continue to take dynamic measures and remain committed to further enhance and sustain the highest ethical standards of Corporate Governance in line with international best practices as well as create a strong compliance culture.
The Board of Directors firmly believes that good corporate governance is fundamental in ensuring the proper management of Nakilat, while taking into consideration the interest of all stakeholders. We recognize that the way we interact with stakeholders is key for the success of our business. Nakilat believes that as the global awareness toward governance becomes vital, we aim to undertake every necessary effort to raise awareness about governance within the company.
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.
Operational Highlights
Nakilat demonstrated a strong commitment to ensure compliance to the highest standards of quality and customer centricity, delivering reliable and cost-effective services. The main operational focus throughout 2019 was to safely complete a large number of second special survey dry dockings.
Highlights from 2019 include:
Fleet
- 18 Nakilat managed vessels were all safely and cost effectively dry docked, without compromising vessel availability to our charterers
- Expanded its LNG fleet with four additional newbuild liquefied natural gas (LNG) carriers which will be fitted with the latest technology systems, through the establishment of a new Joint Venture with Maran. The new vessels will be commercially and technically managed by Nakilat with a delivery time between 2020 and 2021.
- Acquired the full ownership of four Q-Flex LNG carriers from its joint-venture partner, International Seaways, Inc. (“INSW”)
- Strengthened its in-house capabilities by means of modernizing systems, enhancing human capital capacity, developing competencies, and acquiring technical know-how in preparation for the next phase of LNG fleet management transition, as well as technical management for the FSRU and four newbuild LNG vessels
Shipyard
Nakilat’s world-class Erhama Bin Jaber Al Jalahma Shipyard is jointly operated by Nakilat-Keppel Offshore & Marine (N-KOM) and Nakilat Damen Shipyards Qatar (NDSQ). N-KOM provides ship repair and conversion as well as maintenance and repair of marine and offshore vessels, while NDSQ offers ship building and refits for yachts and naval vessels.
- N-KOM completed more than 960 repairs for a variety of vessels such as LNG, LPG, VLCC, tankers and small vessels
- N-KOM celebrated the completion of the 200th LNG carrier repair
- N-KOM completed more than 110 offshore repair, fabrication and industrial engineering projects, including delivery of Bul Hanine fabrication project for Qatar Petroleum and fabrication of North Field bravo (NFB) Additional Living Quarters Expansion for Qatargas
- NDSQ delivered 2 Stan Tug 2309 to Hamad Port
- NDSQ completed warranty of 2 Fast Diving Support Vessels (FDV)
- NDSQ executed repairs on and tests to 9 vessels
Marine Services
- NAC became the first local shipping agency to set-up a global hub operation from Qatar
- NAC attended to more than 3,500 port calls in Qatar
- NAC attended to more than 1,100 port calls and canal transits overseas during NAC’s first year offering global hub agency services
- Over 200 vessels of various types have utilized VSU services at Ras Laffan, including Nakilat-owned, joint-venture and third-party vessels
- NSW completed a new record number of tug jobs of 13,550 for Ras Laffan Port, an increase of 1.5% year on year (YoY) from 2018
- NSW was newly ISO certified to the latest versions of ISO 9001 (Quality Management System), 14001 (Environmental Management) and 45001 (Occupational Health & Safety)
Sustainability at Nakilat
Safety Excellence
Health & Wellness
Collaborations with Ministry of Public Heath:
- As part of MOPH’s preventative health campaign, a Flu Vaccination Drive was conducted at the Nakilat Corporate office and the Shipyard facility to administer flu shots to all staff
- Workplace Wellness Program to promote an active and healthy lifestyle via several activities such as a smoking cessation and mental health awareness talk
Wellness activities were conducted throughout the year, with various sporting activities offered to employees to encourage them to stay fit and healthy
Caring about Our Environment
- All NSQL-managed vessels completed the Inventory of Hazardous Material in compliance with the IMO Hong Kong Convention
- Through sustained efforts at recycling and reducing consumption, the NSQL fleet reduced their garbage output by 2.4% in 2019 compared to 2018
- Approximately a third of NSQL fleet has been retrofitted with the Ballast Water Treatment System
- Nakilat joint ventures NSW and QFAB conducted various waste clean-ups in support of World Clean Up Day and World Ocean Day
- A tree planting initiative was conducted by volunteers at the Erhama Bin Jaber Al Jalahma Shipyard
Community Outreach
Raising Awareness with Qatar Cancer Society
Nakilat partnered with Qatar Cancer Society and sponsored the Thyroid Cancer Conference held in April, which provided a platform to raise awareness about the available services in Qatar for thyroid gland pproblems, methods of self-examination and medical consultation on skin care for people with thyroid cancer.
Partnering with Education Above All
In the spirit of the holy month of Ramadan, Nakilat partnered with Education Above All to raise funds and provide educational assistance to underprivileged children living in Qatar.
Blood Donation Drive
Nakilat partnered with the Blood Unit of Hamad Medical Corporation (HMC) and organized blood donation drives for employees and tenants at its headquarters and the Erhama bin Jaber Al Jalahma Shipyard.
Human Capital & Capability Development
Nakilat continuously focuses on the personal and professional development of its employees in order to effectively contribute to the achievement of its operational and strategic goals. This focus is maintained through wide-ranging, innovative and blended learning and development activities offered to employees on the job, in classrooms and/or online. We prioritize critical business-related development needs in relation to technical skills, interpersonal skills and management & leadership capability. Where appropriate, internal subject matter expert knowledge is utilized in the form of peer-to-peer learning and knowledge sharing.
In 2019, Nakilat continued to focus on succession planning, leadership development, employee engagement as well as retention. The first phase of a systematic succession planning process was established, with successors identified for critical roles.
In addition, Nakilat engaged with the company’s leadership to craft and design a bespoke, world-class leadership development program applicable to all our managers. This overarching program has been designed to accommodate three different levels of leaders in Nakilat; namely, executive leaders, high potential leaders and emerging leaders with consistent theme being taught to varying degrees of complexity and depth. This program will be launched on a phased basis starting 2020. Our continued efforts at promoting a learning culture to attract and retain our highly-skilled workforce and nurture our emerging talent is evidenced by our achievements throughout the year.
