ECONOMIC REVIEW AND OUTLOOK 2024 saw a relative softening of macroeconomic conditions, with inflation easing in most major markets and global growth projected to rise to 3.2%, edging closer to the long-term average. Nevertheless, businesses continued to grapple with supply chain disruptions and volatile energy markets driven by geopolitical instability, while rising raw material and labour costs remained a persistent challenge. Against this backdrop, our resilient economic and operational performance — marked by robust international expansion and a 70.6% year-on-year increase in Group-wide profit — underscores the effectiveness of our cost optimisation efforts and the strength of our positioning as a Technology-Enabled Solutions Company. The strong performance is driven by the international diversification strategy, cost optimisation effort and tech enabled positioning. This positions us well to capitalise on sustained growth in the facilities management market. In particular, UAE and Gulf Cooperation Council (GCC) region are forecasted to grow at a compound annual growth rate (CAGR) of approximately 9.0% and 9.5%, respectively, from 2024 to 2030, driven by increased demand for integrated, technology-led services. Meanwhile, the outlook for our Infrastructure Solutions business remains positive, underpinned by strong momentum in Malaysia’s construction sector, which is expected to grow at a CAGR of 8.55% between 2025 and 2030. Record-high foreign direct investment of RM378.5 billion in 2024 and the rapid expansion of high-tech infrastructure, such as data centres, further support this trajectory. Additionally, Indonesia presents a promising long-term opportunity, with infrastructure spending expected to more than double by 2025, alongside major nation-building projects such as the development of Nusantara, the country’s new capital. Response: • Optimising costs by implementing mechanisation and automation, streamlining finance processes and rationalising our business structure • Optimising workforce related costs through rightsizing exercise which involves more stringent hiring controls, benchmarking study and Voluntary Separation Scheme (VSS) • Investing in technology-driven solutions to drive differentiation in the competitive FM space • Introducing sustainable FM solutions, including in energy performance and optimisation, design and build, and smart building integration, to help clients on their ESG transitions Trends: • Rise in minimum wage and introduction of mandatory EPF contributions for foreign workers driving cost increase • Ageing facilities and assets require specific maintenance at mostly higher cost • Asset replacement model by clients impacting internal initiatives • Competitive pressure from smaller, localised FM operators • Potential for increase in energy prices driven by rise in base tariff for electricity • Increased demand for tech-enabled and sustainable solutions • Rising regulatory stringencies on environmental practices Malaysia is our home country and is the hub of our four business divisions and our workforce. While remaining our core driver of growth, the country’s industry, labour and regulatory landscape drives margin pressures that require a cohesive response. MALAYSIA 59 MANAGEMENT DISCUSSION AND ANALYSIS Operating Environment & Market Trends
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