The global economy is set to continue its gradual recovery in 2025, with the IMF predicting growth of 3.3%, alongside reduced inflation at 4.2%. This should provide a solid base for demand growth and increased investment in infrastructure, which will support our business. A high level of uncertainty does remain, however, on the future evolution of trade tensions between the US and its key partners. Should the situation deteriorate further, we would expect significant pressure on our margins and a general slowdown in large-scale projects. Nevertheless, we will continue to mitigate against the impact of macroeconomic shocks by strategically diversifying our business interests across industry and geography, increasing our presence in growth markets such as the Middle East, and investing in technology and sustainability as key differentiators. OUTLOOK MACROECONOMIC CHALLENGES The macroeconomic headwinds faced over the preceding two years have eased during FY2024, giving way to improved global growth and lower inflation. However, trade tensions between the world’s leading economies, exacerbated by the policy stance of the current US administration, weighs down the future economic outlook. Risk: Opportunities: Macroeconomic uncertainty may lead building or facility owners to delay projects, reducing demand and increasing competition Increased inflation driven by trade wars and tariffs, leading to reduced margins Appreciation of the Ringgit against major currencies could impact our profitability in overseas markets Increase in investment in Malaysia and the Southeast Asia region as a response to global trade tensions, driving growth opportunities Growth in demand for technology-led and sustainable solutions provides us with a means to differentiate and drive growth Response: • Increasing our presence and investment in growth markets, such as UAE and KSA, through strategic partnerships and acquisitions • Differentiating ourselves in the Facilities Management (FM) market by integrating cutting-edge technologies and sustainable solutions into our offerings, thereby increasing our value to modern-day customers • Focusing on cost optimisation through automation and mechanisation, streamlining our finance and procurement processes and rationalising our business structure and workforce • Rolling out innovative products and services to drive growth in the expanding market for sustainable solutions • Maintaining our focus on our concessions-based business, which provides stability amidst evolving macroeconomic conditions LINK TO Capitals Material Matters Risks Stakeholders M2 M3 S2 S3 R1 R3 63 MANAGEMENT DISCUSSION AND ANALYSIS Key Market Trends
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