Strategic Initiatives - Reinforce, Reposition & Ready to Rise FY2026 marked continued progress in strengthening Destini’s core capabilities, securing longer-term business opportunities and reinforcing financial discipline. The key accomplishments during the year are summarised below: a) Advancing Rail Leadership - Completing the Full-Lifecycle MRO Platform: Mobility remained the Group's primary engine of growth and the centre of its strategic ambition. During the year, Destini continued to execute its long-term Ministry of Transport (MOT) mandates - including the RM531.39 million Level 4 MRO contract for 35 Class 92 electric train sets and the RM71.00 million Level 3 MRO contract for Class 93/2 electric trains - while sustaining uninterrupted train-set deliveries. A defining milestone was the attainment of the International Railway Industry Standard (IRIS) certification, placing Destini's rail operations on an internationally recognised quality benchmark and opening the pathway to regional mandates. Subsequent to year-end, the Group via its subsidiary M Rail Technics (Railtec) secured a RM45.58 million MRO contract from Railway Assets Corporation (RAC) covering 13 passenger train sets, an award that completed Railtec's capability stack across all maintenance tiers (Level 1 to Level 4) and established Destini as Malaysia's first end-to-end, full-lifecycle rail MRO provider. This structural milestone materially widens the Group's land-transport footprint and anchors its strategy to decisively scale the high-margin mobility sector. b) Scaling the Energy Services Platform: In Energy, Destini translated targeted capital investment into long-term, recurring revenue opportunities. The Group expanded its Tubular Running Services (TRS) equipment fleet and technical workforce to capture higher-margin offshore well-services work. During the year, DOS secured a five-year TRS master agreement with PETRONAS Carigali extending through March 2031, providing a long-term anchor for multi-year revenue visibility and asset utilisation. Subsequent to year-end, this was reinforced by a long-term TRS contract with Searah (Malaysia) for West Region operations, also running to March 2031, broadening the division's activity base and earnings support entering FY2027. c) Strengthening Working Capital and Balance-Sheet Discipline: Destini maintained rigorous control of its balance sheet throughout the year, holding net gearing at a conservative 0.32 times, containing finance costs and shielding operating margins from additional borrowing expenses.. Within the Aviation & Defence segment, the Group executed a focused recovery of long-standing institutional receivables. These efforts reduced trade-receivables, unlocked meaningful cash inflows, and strengthened operating cash flow and Group liquidity - all achieved without expanding the Group's debt facilities. d) Deepening Digital and Technical Capabilities through Strategic Partnerships: Recognising that technical credibility is central to winning higher-value mandates, Destini advanced its digital Maintenance, Repair and Overhaul (MRO) agenda and strengthened its partnership ecosystem. Subsequent to year-end, the Group entered into a strategic MoU with Siemens Mobility focused on digital railway MRO and technical collaboration - a partnership that strengthens Destini's technical capabilities and provides a platform to develop data-driven MRO solutions for current and future rail opportunities. DESTINI BERHAD 39 ANNUAL REPORT 2026
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