Quarterly Report For The Financial Period Ended 30 June 2025

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Unaudited Condensed Consolidated Statements Of Profit Or Loss and Comprehensive Income For The Current Quarter And Year-To-Date ("YTD")
Ended 30 June 2025

Unaudited Condensed Consolidated Statements of Financial Position
As at 30 June 2025

Group's Financial Performance Review

CURRENT QUARTER FINANCIAL PERFORMANCE

For the second quarter ended 30 June 2025 ("Q2 2025"), the Group recorded profit after tax attributable to owners of the Company (PATAMI) of RM10.11 million, compared to RM10.34 million in Q2 2024, a slight decrease of 2%. Operating revenue stood at RM20.73 million versus RM21.41 million in Q2 2024, representing a 3% decline. The liquid fertiliser segment remained the Group's largest contributor, although revenue was affected by seasonal delivery timing and softer sales volume. The Property & Construction Division contributed RM2.29 million (Q2 2024: RM1.25 million) from milestone-based project management fees under a tissue paper plant contract at the Group's Green Technology Park.

Cost of sales decreased by 28% to RM5.58 million (Q2 2024: RM7.76 million), supported by production efficiencies and the use of in-house by-products such as black liquor. Consequently, gross profit rose 11% to RM15.16 million, with margins significantly improved. Other income almost doubled to RM2.21 million (Q2 2024: RM1.17 million), arising mainly from black liquor sales, equipment disposal and minor recurring income. Operating expenses increased, with selling and distribution expenses at RM70,000 (Q2 2024: RM50,000), employee salaries and benefits up 12% to RM1.72 million, while other operating and administrative expenses increased to RM3.28 million, largely due to higher corporate costs and expenses associated with black liquor processing and marketing activities.

Profit from operations was RM11.50 million, broadly in line with Q2 2024. Net finance cost rose to RM1.41 million (Q2 2024: RM1.24 million), leading to profit before tax of RM10.09 million (Q2 2024: RM10.34 million). No income tax expense was recognised, consistent with Q2 2024, as the Group continued to benefit from tax incentives and the utilisation of unabsorbed allowances.

YEAR TO DATE FINANCIAL PERFORMANCE

For the six months ended 30 June 2025, the Group recorded PATAMI of RM17.25 million, representing a 29% increase compared to RM13.37 million in 1H 2024. Operating revenue amounted to RM34.82 million, broadly unchanged against RM34.73 million in the corresponding period. The liquid fertiliser segment continued to underpin performance, complemented by the Property & Construction Division's RM5.54 million contribution (1H 2024: RM2.64 million) from the tissue paper plant project.

Cost of sales decreased by 27% to RM11.14 million (1H 2024: RM15.30 million), reflecting efficiency gains in liquid fertiliser production and the in-house utilisation of by-products. This resulted in gross profit increasing by 22% to RM23.68 million (1H 2024: RM19.43 million). Other income more than doubled to RM5.54 million (1H 2024: RM2.64 million), arising from black liquor sales, asset disposals and recurring income from rental and government-related incentives.

Operating expenses increased in line with business activity, with selling and distribution at RM85,000 (1H 2024: RM40,000), employee salaries and benefits rising 7% to RM3.25 million, and other operating and administrative expenses higher at RM4.38 million (1H 2024: RM1.82 million), mainly due to costs related to black liquor sales and corporate expenses. As a result, profit from operations grew 26% to RM18.97 million (1H 2024: RM15.77 million). Net finance cost rose slightly to RM2.65 million (1H 2024: RM2.41 million), leading to a 29% increase in profit before tax to RM17.22 million (1H 2024: RM13.36 million), while PATAMI similarly improved to RM17.25 million.

Commentary on Prospects and Targets

The Group remains focused on strengthening its core manufacturing operations and driving long-term value creation through the progressive development of its flagship Green Technology Park (GTP) in Pekan, Pahang. With projects advancing across pulp and paper, fertiliser, animal feed and biomass, the Group anticipates sustained revenue and earnings growth over the medium term.

A key milestone was reached on 16 April 2025 with the signing of a Joint Venture Agreement between the Group's subsidiary, Nextgreen IOI Pulp Sdn Bhd, and Hong Kong Paper Source Co., Limited, a wholly owned subsidiary of Xiamen C&D Paper & Pulp Group Co., Limited. This led to the incorporation of Neuwhite Paper Pulp Sdn Bhd ("NWPP") on 29 April 2025, which will spearhead the development and operation of a 150,000 metric ton annual capacity bleached chemical empty fruit bunch (EFB) pulp mill under Phase 2A of the GTP. This project marks a major step forward in positioning the Group as a regional producer of sustainable pulp.

In the fertiliser segment, Nextgreen Fertilizer Sdn Bhd (NGF) is progressing towards completion of its 30,000 metric ton solid fertiliser facility, with final approvals for the Certificate of Completion and Compliance (CCC) underway. Trial production runs have commenced, with products packed and delivered for trial plots in Uzbekistan and Libya as well as for application in durian plantations in Raub. These trials are being carried out by potential customers as part of their evaluation process. At the same time, NGF is scaling up its liquid fertiliser production, with an automated facility scheduled for commissioning in Q4 2025. Once both facilities are operational, NGF will have a combined capacity of 60,000 metric tons annually. NGF has also signed a distribution agreement to supply up to 25,000 metric tons annually to the Libyan market, providing a ready export channel once customer trials are successfully concluded."

In the animal feed segment, Nextgreen Agrofeed Sdn Bhd has commenced groundwork for a facility with a planned annual capacity of 10,000 metric tons, with completion targeted by Q4 2025. This facility will diversify the Group's product offerings within the agro-industrial sector and is expected to provide an additional revenue stream.

Meanwhile, GTC Biomass Berhad, a 65%-owned subsidiary, is progressing the development of a nationwide network of 20 Collection and Processing Centers (CPCs) for palm biomass. The first CPC is under development within the GTP, with additional sites identified in Gua Musang, Kelantan, Segamat Johor and Sandakan, Sabah.

Complementing these initiatives, the Group has also embarked on a land optimisation exercise within the GTP to identify subdivided plots suitable for joint venture collaborations. This will support long-term tenancy growth and infrastructure investment, while further monetizing land assets within the park.

The Printing & Publishing Division continues to serve internal needs and niche customers, particularly through Pustaka Sistem Sdn Bhd, which holds the publishing rights for PKJR school activity books under the Ministry of Education syllabus. Demand for PKJR books remains viable, with trial print runs outsourced to third parties at margins of 30-40%, which is more economical compared to in-house printing. Nevertheless, this segment is no longer a core growth driver and will gradually transition towards becoming a distribution hub for the Group's end products, in line with the Group's strategic shift.

Looking ahead, the Group's prospects remain positive, supported by the commercialisation of new facilities, execution of strategic partnerships, and Malaysia's broader shift towards sustainability and the circular economy. These initiatives are expected to solidify the Group's position as a leading player in green manufacturing and industrial development, while delivering sustainable earnings and long-term shareholder value.