Strategic Review to Maximise Value Financial Performance Marine revenue declined to RM48.33 million (FY2025: RM53.55 million), and the segment recorded a LAT of RM5.11 million, compared with a PAT of RM2.64 million in FY2025. The revenue decline was driven mainly by lower boat deliveries. Boat manufacturing accounts for the larger share of Marine revenue, and several deliveries were deferred during the year following delays to the shipyard production schedule, with the conflict in the Middle East a key contributing factor. Operational Performance Operating through Vanguarde and Techno Fibre, the segment provides lifeboat manufacturing and marine safety MRO services across Malaysia, Singapore, China, Australia and the Middle East. The manufacturing division delivered a higher contribution during the year, supported by lifeboats delivered from its facility in Nantong, China. The servicing division, however, completed fewer service jobs, particularly in its overseas operations. Key Drivers The servicing division was affected by geopolitical developments in West Asia and disruption in the Strait of Hormuz, which constrained operations in the Middle East and the United Arab Emirates and raised operating costs. The resulting reduction in MRO servicing volume was the primary driver of revenue decline and the shift to a loss. Growth in manufacturing provided a partial offset but was insufficient to sustain profitability. Major Developments • T he manufacturing division continued to build its order flow for lifeboats, which typically carry a production lead time of nine to twelve months and support revenue recognition into the following financial year. • Marine accounted for approximately 2.48% of the Group's order book as at 30 June 2026. Outlook As part of the Group's portfolio review, Management is evaluating Marine’s strategic positioning to determine the most appropriate future direction. While the review is ongoing, Management will continue to manage operating costs and evaluate suitable opportunities to extend its heat exchange services into adjacent markets, including data centres. The segment’s current authorisation from Alfa Laval allows it to bid for data centre cooling projects, a market that Mordor Intelligence forecasts to grow from USD6.77 billion in 2026 to USD18.79 billion by 2031. For FY2027, Management's priorities are to convert this authorisation into secured contracts, manage cost pressures arising from continued disruption to Gulf shipping, and replenish the segment's order book. MARINE DESTINI BERHAD 37 ANNUAL REPORT 2026
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