STRATEGIC REVIEW • Financial and Capital Discipline Risk Financial performance is sensitive to changes in market conditions and operating outlook, particularly in capital-intensive sectors. Maintaining financial flexibility and efficient capital allocation remains critical for ongoing operations and strategic initiatives. Mitigation measures include tighter cost control, refined capital allocation processes and close monitoring of financial performance. The Sukuk Wakalah programme expands funding options and supports disciplined capital deployment. • Operational Disruption and Execution Risk Operations are exposed to risks affecting production continuity, asset performance and project delivery. During FY2025, a power outage at Kulim Hi-Tech Park in May 2025 affected SilTerra’s semiconductor manufacturing operations. The Energy segment faced gas supply constraints and temporary shutdowns of producing assets. This unplanned events were mostly resolved by the end of December 2025 when production was reinstated. Project delivery and operational initiatives also introduce execution risk in each business segment. KEY RISK THEMES IN FY2025 In FY2025, the Group’s risk profile evolved in response to external market conditions as well as internal operational and strategic developments. The following themes outline the main factors affecting performance and positioning during the year: • Market and Cyclical Risk The Group operates in sectors exposed to market volatility and demand variability. The Semiconductor segment experienced continued inventory adjustments and lower order volumes. The Energy segment faced lower realised oil prices and fluctuations in lifting volumes. These factors affect revenue, utilisation and margins in each business segment. Mitigation measures include shifting product mix towards higher-value applications, adjusting production planning to demand conditions and maintaining disciplined cost management to sustain performance under unpredictable market conditions. 51 OPERATIONAL REVIEW SUSTAINABILITY STATEMENT GOVERNANCE FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION INTELLIGENCE POWERING
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