GCEO IN FOCUS SEMICONDUCTOR SEGMENT Malaysia’s semiconductor sector remained robust in 2025, supported by recovering global electronics demand and continued strength in electrical and electronics (“E&E”) exports. Industry data indicates that higher value segments linked to artificial intelligence (“AI”), data centres and advanced electronics underpinned performance, even as inventory corrections and demand volatility persisted in legacy segments. Looking ahead to 2026, the sector outlook is cautiously positive, anchored by sustained global demand for AI-related infrastructure, advanced packaging and specialised semiconductor applications, alongside continued investment under Malaysia’s National Semiconductor Strategy. SilTerra anchored the Group’s Semiconductor business amid a challenging operational condition in FY2025. While external disruptions affected near-term output, efforts were directed towards production stability, manufacturing reliability and greater operational consistency, laying a solid foundation for recovery. During the year, SilTerra reframed its product mix toward higher value semiconductors due to heightened demand from Emerging Technology segments such as AI infrastructure, data centres, electric vehicles (“EV”) and advanced industrial applications. This transition contributed to improved average selling prices and shored up the commercial relevance of its specialised process technologies. Targeted investments during the year supported process capabilities aligned with higher value manufacturing. Although market conditions within the semiconductor sector remained demanding, improvements in product mix, pricing and technical capability have placed SilTerra on a firmer footing. Recovery is expected to be driven by sustained production stability, improved factory utilisation and continued demand for specialised, higher value semiconductor applications. ENERGY SEGMENT Malaysia’s upstream oil and gas sector showed resilience through 2025, supported by stable domestic production and continued investment under PETRONAS’ activity plans. While natural decline at mature fields persists, development activity in marginal and brownfield assets remained active, helping sustain output levels. For 2026, Malaysia’s upstream outlook is cautious but constructive, with emphasis on controlled capital expenditure, better project management and incremental production from near-term developments, particularly in offshore Peninsular Malaysia. The UK North Sea faced a more challenging environment in 2025. Elevated fiscal pressure following the Energy Profits Levy (“EPL”), combined with cost inflation and asset maturity, continued to weigh on investment appetite and production economics. While production remains ongoing, operators have maintained a conservative posture, prioritising cash management and operational efficiency. Heading into 2026, the outlook remains subdued, with limited new investment expected until greater fiscal clarity emerges ahead of the EPL’s scheduled expiry in 2030. The Energy segment navigated a year of adjustment amid regulatory pressure and variable operating conditions. In the UK North Sea, production from the Anasuria field averaged around 1,600 barrels per day, with performance reflecting the challenges associated with mature producing assets and a more onerous fiscal environment. Production continued under an evolving fiscal framework ahead of the levy’s scheduled expiry in 2030, underscoring the importance of tighter asset management throughout the Energy value chain. The portfolio continued to rebalance towards assets offering clearer production visibility and stronger operating control. In Malaysia, upstream developments progressed in line with planned development, with the Abu Cluster, located about 250 km off the east coast of Peninsular Malaysia in the Northeast Malay Basin, moving closer towards targeted first oil in FY2026. This was supported by regulatory approvals from PETRONAS and a crude offtake arrangement with PETRONAS Trading Corporation. Progress was also made on the Beta project, located proximity within four to 10 km from the existing Abu Cluster, as well as on longer horizon developments associated with the Meranti Cluster, situated about 80 km offshore Kuala Terengganu, adding depth to the domestic development pipeline. The Energy segment’s earnings profile is becoming more resilient, underpinned by domestic production growth while overseas assets are managed for cash generation. We foresee that delivery milestones at Abu and progress across the Malaysian project pipeline will determine the segment’s positive contribution in the mid- to longer term. DNeX INTEGRATED REPORT 2025 42 ABOUT THIS REPORT LEADERSHIP VALUE CREATION @DNeX LEADERSHIP INSIGHTS OVERVIEW OF DAGANG NeXCHANGE BERHAD
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