2 LEADERSHIP INSIGHTS 27 Our operating environment, however, remains demanding. Over the past year, rising cost pressures, changing customer expectations and greater caution around investment have affected business conditions across our sectors, with a corresponding impact on our financial performance. There is every indication that these pressures will remain a feature of the landscape moving forward. The steps we take now will thus shape our future trajectory, and the Board has every confidence that the necessary foundations are in place to help UEM Edgenta pursue stronger and more sustainable growth in the years ahead. OPERATING ENVIRONMENT The global economy demonstrated resilience in 2025, expanding by an estimated 3.3% according to the IMF, identical to the growth rate in the year prior. On closer inspection, however, this headline growth figure was partly inflated by the front-loading of trade activity, as businesses accelerated purchases ahead of anticipated tariff increases. Moreover, geopolitical and economic turbulence continued to affect the operations of companies and the resilience of supply chains around the world. Malaysia’s economy followed a similar trend. While GDP growth reached 5.2% for the year, the operating environment was more complex on the ground. Companies had to contend with rising costs stemming from increases in the national minimum wage, the expansion of the Sales and Services Tax (SST) framework to new goods and categories, and increases in petrol and electricity prices, amongst other developments. These factors contributed to a higher cost base for players across the business ecosystem. As a result, many of our domestic and international clients adopted a more cautious stance, shifting their focus towards improving operational efficiency rather than pursuing new investments. In some cases, this also translated into organisations choosing to insource services that had previously been outsourced. Regulatory and policy developments also had a material impact on the operating landscape. Across our markets, this included more stringent requirements around ESG and emissions reporting, as well as government-led initiatives in Malaysia such as the Public-Private Partnerships (“PPP”) Master Plan 2030, the National Energy Transition Roadmap (“NETR”), and the New Industrial Master Plan. POSITIONING FOR THE PATH AHEAD In seeking to better meet the evolving needs of asset owners, the successful completion of the EoTF2025 strategy represents an important milestone. Over the past five years, the programme has delivered significant gains. These include more than RM100 million in cost savings achieved ahead of schedule, over RM5.3 billion in technologyenabled contract wins since 2021, and a broader international footprint supported by strategic partnerships and a growing customer base across our markets, with a particular focus on the Gulf Cooperation Council (“GCC”) states. More importantly, this transformation has future-proofed the Group in several key ways. First, our technology-enabled solutions provide an important point of differentiation in an increasingly competitive asset management landscape. Second, the Group is now better positioned to participate in more integrated and higher-value asset management opportunities, enhancing our margins and the value we can deliver to clients. Third, our diversified international presence provides a powerful avenue for growth while helping to mitigate geographic and sector concentration risks. As with any strategic shift of this scale, there is an inevitable incubation period before the full benefits are realised. Nevertheless, the Board believes that EoTF2025 has equipped the Group with the necessary capabilities and presence not only to compete effectively in a changing facilities management landscape, but to thrive within it. With stronger capabilities and a shared sense of purpose across the organisation, we are well positioned to move forward with confidence.
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