PENANG: Main market-listed leading insulation producer PGF Capital Bhd recorded revenue of RM45.4 million for the second quarter (Q2) ended August 31, 2025 (FY26), marking a 7.1% year-on-year (YoY) increase from RM42.4 million in Q2 FY25, driven by stable demand for its insulation products.
Profit before tax (PBT) stood at RM8.1 million compared to RM9.5 million in Q2 FY25, with the moderation mainly attributed to a mark-to-market unrealised loss of RM1.1 million on cross-currency swap facilities undertaken as part of the group’s expansion plan, coupled with an increase in operating expenses.
Excluding the unrealised loss, the group’s adjusted PBT would have been RM9.2 million in Q2 FY26.
Meanwhile, profit after tax (PAT) was RM5.0 million, versus RM7.1 million a year ago.
Segmentally, the Insulation segment remained the group’s key revenue driver, accounting for 99.7% of total revenue in Q2 FY26, with the balance from property development, investment holding, and other segments.
Executive director and group CEO Fong Wern Sheng said demand from Oceania, particularly Australia, remains strong, underpinned by government housing targets and energy-efficiency incentives.
“Australia’s goal of building 1.2 million new homes and the Victorian Energy Upgrades programme, which halves the ceiling insulation costs, continue to drive demand,” he said in a statement.
Fong added that the initiatives under Budget 2026 reflect the government’s continued shift toward greener growth.
“The introduction of the carbon tax next year, starting with the iron, steel and energy sectors, signals a gradual tightening of carbon emissions.
“At the same time, initiatives like the RM1.0 billion Green Technology Financing Scheme and the proposed 100% Green Investment Tax Allowance for MyHIJAU-certified products show a stronger policy push for energy-efficient technologies.
“While these measures may take time to take effect, but they certainly signal a market that is placing greater emphasis on sustainable materials,” said Fong.
On the expansion front, PGF Capital’s new production facility in Kulim is progressing on schedule and is expected to commence operations in the first half of 2026.
The new plant will increase the group’s annual production capacity by 40,000 metric tonnes to 65,000 metric tonnes, providing a meaningful boost to the group’s bottom line as production ramps up.
The project has also been granted a five-plus-five-year corporate tax holiday under the Northern Corridor Economic Region (NCER) incentive programme.
Addressing the reciprocal tariffs by the US, which took effect on August 1, 2025,
Fong said the group does not expect any significant impact on revenue or procurement, as PGF Capital has no exports to the US.
“However, the group will keep a close watch on possible supply chain impacts.”
On the property development front, both the group’s projects are progressing towards launch.
In Kulim Hi-Tech Park, Kedah, its joint venture company, Nexel Development KHTP Sdn Bhd, is finalising plans for a mixed-use development with an estimated gross development value (GDV) of RM600 million, with soft launch targeted for early 2026.
In Tanjong Malim, Perak, the group has secured conditional planning approval for Phase 1 of the Diamond Creeks Country Retreat, comprising 1,808 residential and commercial units under a land sale arrangement with Malvest Properties Sdn Bhd.
The group is currently addressing infrastructure conditions imposed to facilitate the commencement of the project.
The project aligns with the government’s vision to transform Proton City into an Automotive High-Tech Valley (AHTV).
More recently, Chinese electric vehicle (EV) manufacturer BYD announced in August 2025 that it will set up its first automotive assembly plant in Malaysia at the KLK TechPark in Tanjong Malim, located next to AHTV.
Set to begin operations in 2026, the BYD plant will also drive housing and commercial growth in the area.
On a cumulative six-month basis, PGF Capital posted revenue of RM86.0 million in 1H FY26, up 3.7% YoY from RM82.9 million recorded in 1H FY25.
PBT stood at RM18.1 million, down from RM18.6 million in 1HFY25. Excluding the RM1.7 million unrealised loss, adjusted PBT for 1HFY26 would have been RM19.8 million.
Meanwhile, PAT came in at RM12.5 million, down from RM13.8 million previously.
The group’s operations are supported by its solid balance sheet, with a net gearing ratio of 0.25 times and net assets per share of RM1.41 as at 31 August 2025.
