PERFORMANCE Strengthening Efficiency and Positioning for Growth Financial Performance Aviation & Defence’s activities moderated during the year, with revenue of RM37.82 million (FY2025: RM75.20 million), and the segment recorded a loss after tax (LAT) of RM5.05 million, compared with a PAT of RM6.11 million in FY2025. Operational Performance Destini Prima continued to provide recurring maintenance services and supply to the Ministry of Defence (MINDEF), including the panel contract for non-proprietary aircraft spare parts for the Royal Malaysian Air Force (RMAF), which was extended to 31 December 2026. Its technical teams remained deployed across its network of branches at military installations to sustain service readiness. While MRO activity was lower during the year, the segment continued to maintain its established technical capabilities and customer relationships. Key Drivers Lower revenue primarily reflected reduced MRO service activity as contracts reached their approved ceilings, together with the absence of high-value, one-off projects recognised in FY2025. As these contracts are structured with a maximum value, further work cannot be billed until the relevant ceilings are revised. This administrative process temporarily held back delivery and billing despite a healthy underlying backlog. With technical teams required to remain deployed between contract renewals, fixed costs weighed on segment results. AVIATION & DEFENCE Major Developments • I n September 2025, Destini Prima's RMAF panel contract for non-proprietary aircraft spare parts was extended by 18 months to 31 December 2026, preserving its position as an approved supplier. • T he revision of the relevant contract ceilings is being pursued with the authorities, which would allow deliveries and billing to resume at normal levels. Outlook The segment continues to generate a positive gross profit, but fixed overheads during periods between contract renewals have weighed on net results. Management has commenced an operational efficiency and manpower rationalisation study to better align fixed staff costs with active billing cycles. Together with the anticipated revision of contract ceilings and renewal of key contracts, these measures are expected to strengthen the segment's operating leverage and contribution to the Group. Destini will continue to leverage its established technical capabilities, accreditations and long-standing MINDEF relationships to pursue recurring and higher-value opportunities within the defence MRO market. • M anagement intensified the collection of longstanding receivables. Key recoveries achieved after the year end strengthened the Group's working capital position without increasing gearing. • A viation & Defence accounted for approximately 5.62% of the Group's order book as at 30 June 2026. DESTINI BERHAD 35 ANNUAL REPORT 2026
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