OUR BUSINESS AND OPERATIONS
Mycron Steel Berhad operates through two key manufacturing subsidiaries:

Mycron Steel CRC Sdn Bhd (“MCRC”).
which converts Hot Rolled Coil (“HRC”) steel sheets into thinner gauge Cold Rolled Coil (“CRC”) steel sheets.

Melewar Steel Tube Sdn Bhd (“MST”),
which manufactures steel tubes and pipes (“Steel Tube”) using HRC and CRC.

Additionally, the Group’s trading arm, Silver Victory Sdn Bhd (“SV”), supports the distribution of steel-related products.
Together, these entities anchor the Group’s position at the forefront of Malaysia’s steel industry, serving both domestic and international markets.

For FY2026, the Group recorded revenue of RM764.0 million, compared with RM722.0 million in FY2025. More significantly, the Group returned to profitability, recording a pre-tax profit of RM16.3 million compared with a pre-tax loss of RM0.7 million in the preceding financial year. The improvement reflected stronger sales volumes and operating performance despite continued pressure from softer steel prices and a highly competitive market environment.

In the first financial quarter, the Group recorded revenue of RM203.1 million, up from RM167.8 million in the preceding quarter, supported by higher sales volumes across both the CRC and Steel Tube divisions. Together with higher investment gains and lower interest costs, the improved performance resulted in a pre-tax profit of RM5.6 million, compared with a pre-tax loss of RM0.8 million in the preceding quarter.

In the second financial quarter, revenue moderated to RM187.4 million, mainly due to lower average selling prices in line with the prevailing downward trend in steel prices. The Steel Tube division recorded improved gross profit, supported by higher sales volume and production throughput, while the CRC division experienced margin pressure as export sales softened amid increasing trade barriers and tariff-related uncertainties in the United States. Notwithstanding a foreign exchange loss of RM0.4 million, the Group recorded a stronger operating performance. Higher interest income and lower interest costs further supported a pre-tax profit of RM5.0 million for the quarter.

The third financial quarter saw revenue decline to RM157.6 million, with demand affected by the seasonal slowdown surrounding the Chinese New Year and Hari Raya festive periods. Despite the softer revenue, overall sales volume increased while average unit selling prices declined, reflecting the continued weakness in steel prices. Both the CRC and Steel Tube divisions recorded higher sales volumes, although the benefit was offset by lower selling prices. Margin compression was particularly pronounced in the CRC division. Consequently, the Group recorded a marginal pre-tax loss of RM0.15 million for the quarter, although year-to-date profitability remained positive.

Performance strengthened in the fourth financial quarter, with revenue rising to RM215.9 million, supported by improved sales volumes across both divisions, led by the CRC division. Higher production and sales throughput contributed to improved gross margins, while firmer steel prices during the early part of the quarter improved raw material to-selling price spreads and supported buying interest. Consequently, the Group recorded a pre-tax profit of RM5.8 million for the quarter.

Overall, Mycron’s ability to generate profits against a difficult backdrop demonstrates the continuous improvement that has taken place in Mycron over many years. Through consistent focus and discipline on cost competitiveness, manufacturing optimisation, strategic investments to reduce energy dependence and reduce our carbon footprint, Mycron has become a stronger and more resilient business. Most importantly, we have committed and talented employees that make these achievements possible.

The last twelve months have been a reminder of how quickly the global operating environment can change in ways we least expect. The financial year ended 30 June 2026 unfolded against heightened geopolitical tensions, an increasingly fragmented global trading system, and persistent uncertainty across major markets. While the global economy remained resilient, growth was uneven, with elevated operating costs and increasingly protectionist trade policies weighing on investment, business confidence, and international trade.

Globally, geopolitical tensions and conflicts have intensified. For the steel industry, market pressures mount as global capacity reaches new highs and trade circumvention accelerates.

For the steel industry, these challenges were compounded by persistent global excess capacity and subdued demand. The World Steel Association projected global steel demand to grow by only 0.3% in 2026 to approximately 1.72 billion tonnes, following a prolonged period of weakness across several major steel-consuming markets. Against this backdrop, excess production capacity continued to exert significant pressure on steel prices and industry margins.

China’s share of global excess capacity rose, spilling surges of exports to international markets. This surge of exports is putting enormous pressure on the international steel markets by displacing domestic production across the world. China’s steel exports reached a record high of 131 million tonnes in 2025 which have triggered significant trade policy responses from countries.

At the same time, trade barriers in major consuming markets became increasingly restrictive. In June 2025, the United States increased its Section 232 tariffs on most steel imports from 25% to 50%, while other economies strengthened or introduced additional trade-protection measures. These developments further altered established trade flows and increased the risk of surplus steel being redirected towards more accessible markets, including ASEAN. Malaysia’s relatively open trading environment consequently remained exposed to greater import pressure and increasingly competitive regional steel flows.

As the year progressed, geopolitical risks intensified further with the escalation of conflict in the Middle East. Rising energy and commodity prices, together with constraints affecting passage through the Strait of Hormuz, added further uncertainty to global supply chains and the movement of critical raw materials. These developments introduced additional downside risks to global growth and steel demand while heightening concerns over energy and raw-material security for energy-intensive industries such as steel.

Against this volatile external environment, Malaysia’s broader economy remained resilient. The economy expanded by 5.2% in 2025, supported by domestic demand and continued growth in the services and manufacturing sectors, while growth of 5.4% was recorded in the first quarter of 2026.

However, the positive headline economic performance did not translate proportionately into improved conditions for domestic steel manufacturers, as regional overcapacity, high import penetration, and persistent price competition continued to weigh on industry margins.

The Malaysian Government also continued to address longer-term structural issues within the domestic steel industry, including capacity management, investment quality, licensing requirements, and the transition towards lower carbon production. Greater policy coordination, effective trade measures and disciplined management of industry capacity will be increasingly important to ensuring that future investment supports higher-value production without further aggravating existing supply-and-demand imbalances.

Overall, FY2026 was characterised by weak global steel demand, record export activity from China, increasingly restrictive trade measures, and heightened geopolitical uncertainty. These factors combined to create significant pricing and margin pressures for steel producers throughout the year. Against this challenging backdrop, the Group remained focused on strengthening operational efficiency, maintaining cost discipline, broadening its market reach, and safeguarding its long-term competitiveness.

GOVERNANCE
The Board of Directors recognises that strong corporate governance is fundamental to maintaining stakeholder confidence and supporting the long-term sustainability of the Group. We remain committed to conducting our business with integrity, accountability, and transparency, in line with established corporate governance principles and best practices.

The Board and senior management are committed to upholding high standards of corporate governance and business ethics across the Group’s operations. Our governance framework is supported by, among others, the Board Charter, Terms of Reference for Board Committees, Anti-Fraud and Anti-Corruption Policy, Fit and Proper Policy, Communication Policy, Conflict of Interest Policy, and Corporate Disclosure Policies and Procedures.

SUSTAINABILITY
Operating sustainably is integral to Mycron’s long-term business strategy. We remain committed to embedding sustainability principles across our governance, environmental stewardship, social responsibility and economic performance.

Our sustainability agenda is championed by the Group Chief Executive Officer, with oversight from senior management through the Sustainability Oversight Committee, ensuring that sustainability considerations are incorporated into key business decisions and operational practices.

Our sustainability priorities are aligned with Malaysia’s broader transition towards a more sustainable and competitive economy, including key national frameworks such as the National Energy Transition Roadmap (NETR), the New Industrial Master Plan 2030 (NIMP 2030) and the Circular Economy Policy Framework. Further details on the Group’s sustainability objectives, initiatives and performance are provided in our Sustainability Report.

A significant milestone during the year was the attainment of Environmental Product Declarations (EPDs) by both Mycron Steel CRC Sdn Bhd and Melewar Steel Tube Sdn Bhd. The EPDs provide transparent and independently verified information on the environmental impact of our products across their life cycle, strengthening the Group’s carbon transparency and environmental credentials.

This achievement is increasingly relevant as customers, regulators and supply-chain partners place greater emphasis on the embodied carbon and environmental footprint of steel products. Regulatory developments such as the European Union’s Carbon Border Adjustment Mechanism (CBAM), together with the broader evolution of carbon-pricing frameworks, are expected to make carbon intensity an increasingly important consideration for market access and long-term competitiveness.

Mycron continues to support the transition towards a lower carbon economy through targeted investments in renewable energy, energy efficiency and process optimisation. We are approaching this transition in a measured and pragmatic manner, balancing our decarbonisation ambitions with commercial realities while continuing to strengthen the resilience and competitiveness of our operations.

For Mycron, the objective is not merely to respond to evolving regulatory requirements, but to position the Group competitively for a future in which carbon transparency and lower-emission production will increasingly influence purchasing decisions and market access. The attainment of EPDs by both our CRC and Steel Tube divisions marks an important step in this journey and supports our longer-term ambition to become a leading producer of lower-carbon steel products in Malaysia.

PROSPECTS AND OUTLOOK

The iron and steel industry remains a fundamental pillar of the national economy, supporting infrastructure development, manufacturing activity and Malaysia’s broader industrial growth. While the industry continues to face an increasingly complex operating environment and significant headwinds at the global, regional and domestic levels, steel will remain integral to economic development. Against this backdrop, the Group believes that meaningful opportunities remain for Mycron over the longer term.

The Group ended the financial year on a stronger footing, with performance improving progressively across the year. Sales volume increased by 19.5% year-on-year, although unit margins remained broadly flat. Domestic steel demand was generally resilient throughout the year, albeit the seasonal slowdown during the double-festive period in the third quarter.

The downward trend in steel prices that began in 2022 showed signs of stabilising during much of the financial year, before rebounding towards the end of March amid heightened geopolitical developments in West Asia. Nevertheless, the Group’s margins remained under pressure from elevated production and operating costs, including the expanded Sales and Service Tax, energy, utilities and transportation costs, as well as intense price competition from imported steel products and an increasingly demanding regulatory environment.

While Malaysia’s headline economic indicators remained encouraging, supported by growth in sectors such as data centres, semiconductors, electrical and electronics, and tourism, operating conditions have remained challenging for parts of the broader private sector. Small and medium enterprises, traditional manufacturing, retail and supporting

industries in particular continue to contend with rising operating costs, increased foreign competition and softer order books. Industry surveys and feedback from our customers similarly point to continued pressure on business costs and margins, with some businesses responding through cost rationalisation, downsizing, or relocation.

Looking ahead to the next financial year, domestic steel demand is expected to remain supported, albeit at a more moderate pace. Near-term conditions are likely to remain challenging as steel prices soften and buyers adopt a more cautious purchasing approach amid continued geopolitical uncertainty. At the same time, the domestic market may face greater competitive pressure from imported steel products as excess regional capacity and trade diversion intensify, particularly as major export markets introduce increasingly restrictive trade measures. These conditions are expected to continue weighing on the margins of domestic steel producers, particularly where local cost structures remain elevated relative to regional competitors. Against this backdrop, the outlook for the coming financial year remains cautiously challenging.

Nevertheless, the Group will continue to build on the momentum achieved during the year by strengthening its position in the domestic market while selectively pursuing opportunities in overseas markets. At the same time, we will continue to advocate for a fair and competitive domestic marketplace and remain disciplined in managing costs, improving operational efficiency and protecting margins.

Policymakers in many regions are taking decisive action to address steel overcapacity, support domestic manufacturing, and reinforce the strategic importance of self-sufficiency. In 2026, this is most evident in Europe, where the introduction of CBAM and a strengthened tariff rate quota (TRQ) framework are beginning to affect Mycron’s exports to Europe. In response, Mycron is adapting by diversifying its market base, strengthening its competitiveness, and reducing reliance on individual markets and sectors, thereby enhancing the Group’s resilience to external shocks.

For many years, Malaysian steel producers have faced the challenge of rising imports. Policy measures are needed to address this imbalance. Malaysia should consider measures similar to the European TRQ framework, which establishes a more granular and robust quota system aimed at managing import volumes and reducing excessive import dependence. Such measures could support higher capacity utilisation among domestic steel manufacturers, and, in turn, improve the industry’s overall competitiveness and financial sustainability.

At the same time, the transition towards lower-carbon manufacturing is becoming an increasingly important determinant of competitiveness and market access. Mycron is working to better understand and manage Scope 3 emissions across our value chain, while continuing to reduce the carbon intensity of our own manufacturing operations through reductions in Scope 1 and Scope 2 emissions. Our efforts include energy efficiency and conservation, renewable energy, waste reduction and leaner manufacturing practices. We are also strengthening transparency and product-level carbon traceability through initiatives such as Environmental Product Declarations (EPDs) and CBAM reporting.

We remain steadfast in our commitment to supporting the transition towards a lower-carbon economy. Our approach is pragmatic and focused on creating long-term value, while continuing to reduce the carbon intensity of our own operations. Looking ahead, I remain optimistic about Mycron’s prospects. The momentum within the Group is positive, and steel’s strategic importance is increasingly being recognised by policymakers around the world. As an infinitely recyclable material, steel is fundamental to the global circular economy and will remain indispensable to economic development, infrastructure, and the transition towards a more sustainable future.

DIVIDEND
In view of the Group’s financial position, the Board of Directors does not recommend the payment of any dividend for the financial year ended 30 June 2026.

ACKNOWLEDGMENT AND APPRECIATION
On behalf of the Board, I would like to express my sincere appreciation to our management team and employees for their dedication, resilience, and continued commitment throughout the year.

I would also like to extend our gratitude to our customers, business partners, shareholders, and other stakeholders for their continued trust and support. Your confidence in Mycron remains invaluable as we continue to strengthen the Group and position ourselves for the opportunities ahead.

As we move forward, we remain focused on navigating the challenges before us with discipline and resilience, while building a stronger, more sustainable and competitive Mycron for the future.