ANNUAL REPORT 2025 OUR PERSPECTIVE 37 FINANCIAL REVIEW Building on the momentum generated by our core operations and strategic recalibration, we delivered our strongest financial performance to date. The year under review saw NexG Berhad achieve our highest-ever profitability, supported by sustained revenue from longstanding identity-related contracts and complemented by disciplined cost management. This solid financial footing reflects the resilience of the Group’s secure ID and ICT business, even as we undertake a broader transformation into new growth verticals such as digital identity and strategic alliances. The results affirm the Group’s ability to balance operational continuity with forward-looking investment, laying the groundwork for sustainable earnings growth in the years ahead. Revenue The Group recorded total revenue of RM373.5 million, representing a modest increase of 1.4% compared to RM368.3 million in the previous financial year. This growth was primarily attributed to steady income from existing government contracts, including the ongoing supply of MyKad, passports, biodata pages and security chips to the Ministry of Home Affairs. Management Discussion And Analysis (Cont’d) Gross Profit and Gross Profit Margin The Group achieved a gross profit of RM247.2 million in FY2025, an increase from RM220.6 million in FY2024. This represents a notable improvement of 12.1%, underscoring the Group’s enhanced cost efficiency and favourable sales mix. Gross profit margin also strengthened to 66.2%, up from 59.9% in the previous year, reflecting ongoing operational discipline and optimisation across business segments. This uptrend was driven by a combination of factors, including higher-margin revenue streams from secure ID and document solutions, improved procurement efficiencies, and tighter cost controls. While the Group continues to undertake hardware and infrastructure-based projects—which typically yield lower margins—these were balanced by steady contributions from secure document production and government contracts, which remained the Group’s core strength. Net Profit and Net Profit Margin The Group’s net profit reached RM115.7 million, marking a significant 25.4% increase from RM92.2 million in the previous financial year. Net profit margin also improved to 31.0%, up from 25.0% in FY2024, representing a meaningful enhancement in earnings efficiency. FY2021 Revenue (RM million) Gross Profit (RM million) FY2022 FY2023 FY2024 FY2025 72.0 76.7 189.4 220.6 138.4 136.4 344.7 368.3 247.2 373.5 FY2021 7.3 5.3% 7.5% 22.2% 25.1% 31.0% 10.2 76.4 92.2 115.7 Net Profit (RM million) Net Profit Margin FY2022 FY2023 FY2024 FY2025
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