Chairman’s Statement

FYE 2026 called for disciplined stewardship and prudent execution. In a more demanding operating environment, PMMA delivered a moderated financial performance while remaining profitable, cash-generative and financially resilient. Although the softer results reflected current market conditions, the Company’s underlying fundamentals remain strong.

The Board acknowledges the challenges faced during the year and remains focused on safeguarding PMMA’s financial strength, addressing areas requiring improvement and enhancing operational resilience. Through disciplined execution and a long-term perspective, we remain committed to strengthening the Company’s competitive position and delivering sustainable value for our shareholders and other stakeholders.

A Clear View of the Year

For FYE 2026, PMMA recorded revenue of RM689.9 million and profit before tax of RM37.4 million. Compared with the previous financial year, both revenue and profit before tax declined, reflecting the challenging operating environment and continued pressure across the Company’s commercial and manufacturing operations. Profitability came under pressure from lower sales volume, reduced factory utilisation and fixed-cost absorption, and product mix pressure. A stronger Ringgit negatively affected profitability, as a substantial portion of the Company’s revenue was derived from exports. Lower finance income and a reduced contribution from the associated company further affected profitability.

The Board’s view is that the year should be assessed with clarity. Some pressures were external, including shipment disruption, geopolitical uncertainty and foreign exchange movement. Others point to areas where the Company must continue to improve, including product relevance, market execution, cost discipline and manufacturing responsiveness.

Accordingly, the Board’s focus has been on strengthening the fundamentals of the business. Management has continued to review product competitiveness, strengthen channel execution, manage costs more closely and preserve customer relationships in key markets.

These actions are necessary to rebuild confidence and improve the quality of earnings over time.

Holding Firm to Financial Discipline

PMMA’s financial position remains a key strength. The Company closed the year with total equity of RM773.3 million and cash and fund placements of RM468.8 million. Net cash generated from operating activities remained positive at RM25.9 million.

Although the decline in performance is a matter of concern, these figures indicate that PMMA retains a strong level of financial resilience. As a result, the Company is well positioned to manage current pressures prudently and avoid reactive short-term decisions that could weaken its long-term business prospects.

The Board’s approach to shareholder value remains grounded in prudence. We recognise the importance of returns to shareholders, particularly in a period where market confidence has been affected. At the same time, the Company must preserve the financial strength required to sustain operations, invest selectively and navigate external uncertainty.

In line with our commitment to delivering long-term shareholder value, the Board has approved a dividend of 48 sen per share for FYE 2026, comprising a proposed final dividend of 33 sen and an interim dividend of 15 sen already paid. The recommendation reflects the Board’s commitment to balancing shareholder returns with prudent capital management, taking into account the Company’s financial performance, cash position and requirements for long-term business resilience.

Restoring Confidence Through Discipline

The Board has supported management’s focus on three practical priorities: strengthening product and market relevance, improving market resilience and advancing operational competitiveness.

PMMA’s focus is to pursue growth in a disciplined manner, balancing market competitiveness with product quality, safety, reliability, energy efficiency and brand trust. This balance is important as the Company responds to changing customer expectations while protecting the foundations of long-term value.

During the year, management continued to renew selected product ranges, support product visibility and pursue market-specific opportunities. While market conditions were uneven, selected project-based and market expansion initiatives provided useful support and reinforced the importance of targeted execution. The task now is to build on these areas while addressing underperforming markets and categories with greater discipline.

Strengthening the Operating Base

The year also reinforced the importance of maintaining a responsive manufacturing base. Lower production volume affected utilisation and fixed-cost absorption, making it necessary for management to align capacity, manpower, overtime, maintenance and production planning more closely with demand. Management also continued to drive internal cost-reduction and operating-efficiency initiatives, including value engineering and strategic resourcing activities, to support cost competitiveness without compromising product quality, safety or performance.

PMMA continued to advance its Smart Factory and digitalisation initiatives during the year. These included the use of Industrial Internet of Things data, automation, preventive maintenance systems and selected in-house capability development to improve efficiency, process reliability and operational flexibility.

The gas-supply disruption in April 2025 further tested the Company’s operational resilience and business continuity arrangements. The Company had promptly implemented alternate gas-supply measures to minimise operational disruption and the affected sales were substantially recovered following the restoration of supply.

The Company also strengthened its contingency preparedness through enhanced backup gas-supply arrangements. These measures have reinforced PMMA’s operational resilience and readiness to navigate an increasingly uncertain operating environment.

Sustainability as Practical Resilience

Sustainability remains an important part of PMMA’s long-term competitiveness. The Board views sustainability not as a separate agenda, but as part of how the Company manages efficiency, resource use, resilience and stakeholder confidence.

During the year, PMMA continued to strengthen energy management within its operations. Phase 2 of SA1’s Rooftop Solar System was completed in December 2025, adding 892 kWp of installed capacity and building on earlier rooftop solar installations at SA2 and SA1. With the completion of the SA1 installation, the combined rooftop solar systems are expected to generate approximately 20% of the site’s annual electricity consumption, reducing reliance on grid electricity and supporting PMMA’s carbon reduction efforts.

The Company also continued to implement energy-saving measures such as sensors and timers on powder coating lines, reduction of open areas in melting furnaces to minimise heat loss, and the gradual replacement of traditional lighting with energy-efficient LEDs at both SA1 and SA2.

These initiatives support PMMA’s efforts to improve operational efficiency while reducing the environmental impact of its manufacturing activities. In a year where cost discipline became more important, energy management also remained relevant to the Company’s broader operating performance.

Governance, Risk and Capital Discipline

Sound governance and risk oversight remain central to the Board’s stewardship of PMMA as it continues to oversee the Company’s strategy, financial performance, risk management, sustainability and capital allocation.

The risk environment facing PMMA has become more complex. Geopolitical tensions, shipment disruption, material and logistics cost volatility, foreign exchange movement, product competitiveness, market competition and manpower availability all require close attention.

These risks cannot be eliminated entirely, but they must be managed through preparedness, discipline and clear decision-making.

In FYE 2026, management adopted a more selective approach to capital expenditure in response to softer sales conditions. Non-essential expenditure was deferred, while targeted investment continued in areas linked to productivity, automation, operational resilience and sustainability. The Board believes this balance is appropriate. PMMA must remain prudent, but it must also continue investing in the capabilities that protect its long-term competitiveness.

Looking Ahead

Operating conditions in FYE 2027 are expected to remain challenging, with competition likely to remain intense and market demand uneven. The Board notes early signs of stabilisation in selected areas following the actions undertaken during FYE 2026, although downside risks remain. Ongoing geopolitical tensions in the Middle East may continue to affect shipping routes, customer demand and regional trade flows. Higher raw-material, oil-related and logistics costs could also place further pressure on margins, while foreign exchange movements and domestic price competition will require continued discipline.

Against this backdrop, PMMA is not assuming a broad-based or immediate recovery across all markets. Instead, the Company will remain focused on disciplined execution and the initiatives within its control.

Key priorities include strengthening the relevance of its core product offerings, expanding project, institutional and B2B channels, leveraging the Panasonic and KDK dual-brand portfolio where relevant, pursuing selective ASEAN market opportunities, improving manufacturing productivity and capacity utilisation, safeguarding operational continuity and maintaining prudent capital allocation.

The Board believes that PMMA’s fundamentals provide a platform from which management can continue to respond carefully and constructively. Our responsibility is to protect that platform, maintain disciplined oversight and support the actions needed to rebuild confidence and create sustainable long-term value.

On behalf of the Board, I would like to thank our shareholders for their continued trust and support. I also extend my appreciation to our management team, employees, customers, business partners, suppliers and the wider Panasonic Group for their commitment to PMMA through a demanding year. The Board remains committed to guiding the Company with discipline, transparency and a long-term view of value creation.

Dato’ Azman bin Mahmud
Chairman
Independent Non-Executive Director