Solar District Cooling Group Berhad (“SDCG”) today announced its unaudited financial results for the second quarter ended 30 June 2026 (“Q2 FY2026”).
For Q2 FY2026, the Group recorded revenue of RM10.63 million, representing a 115.4% increase compared with RM4.93 million in the corresponding quarter of the previous financial year (“Q2 FY2025”). The stronger performance was mainly driven by the maintenance of other systems and equipment segment, which increased to RM6.59 million from RM0.23 million, primarily attributable to the progressive revenue recognition of the Variable Refrigerant Flow (“VRF”) project. This more than offset lower BMS revenue of RM3.94 million versus RM4.61 million previously, as fewer BMS projects were at the active installation stage during the quarter.
Gross profit for Q2 FY2026 stood at RM2.28 million compared with RM2.59 million in Q2 FY2025, while gross profit margin moderated to 21.5% from 52.6%. The lower margin reflected the lower-margin nature of the VRF project and higher BMS project costs arising from increased material prices. Despite the margin pressure, PBT increased by 61.5% to RM0.83 million from RM0.51 million, while PAT rose 67.0% to RM0.70 million from RM0.42 million. The improvement in earnings was mainly attributable to lower unrealised foreign exchange losses during the quarter amid lower volatility in the US Dollar.
For the six months ended 30 June 2026 (“6M FY2026”), revenue increased by 83.8% to RM17.84 million from RM9.71 million in 6M FY2025, supported by the stronger VRF project contribution. PBal fees incurred in relation to the bonus issue of warrants and Employees’ Share Option Scheme.
Compared with Q1 FY2026, SDCG delivered a clear sequential recovery, with revenue rising 47.2% from RM7.22 million to RM10.63 million and PBT improving from a loss before tax of RM0.48 milliT was RM0.35 million compared with RM1.38 million previously, while PAT was RM0.22 million versus RM1.10 million. The lower year-to-date profit mainly reflected lower gross profit, higher staff costs following workforce expansion in the second half of FY2025, as well as professionon to a profit before tax of RM0.83 million. The revenue increase was driven by the commencement of BMS upgrading works for the Ministry of Transport, Ministry of Health and a telecommunications company’s buildings, together with higher progressive installation work for VRF projects. Gross profit also increased 17.7% quarter-on-quarter to RM2.28 million, although margin was temporarily affected by additional installation works for the Avisena project incurred ahead of revenue recognition for a variation order pending client approval.
Managing Director of SDCG, Mr. Edison Kong commented, “Q2 FY2026 demonstrates a clear improvement in execution momentum, with revenue more than doubling year-on-year and the Group returning to profitability from the preceding quarter. The ramp-up in BMS upgrading works and the progressive delivery of our VRF project are strengthening our revenue base, while we continue to manage project mix and cost discipline carefully.
At the same time, we are building SDCG beyond project-based engineering income. Our solar photovoltaic (“Solar PV”) Power Purchase Agreement (“PPA”) model has commenced electricity generation and supply to customers, creating a platform for long-term recurring revenue. Together with our BMS capabilities, digitalisation initiatives and strategic partnership with Solarvest, we believe SDCG is well positioned to capture structural demand for energy-efficient and smarter buildings.”
Looking ahead, SDCG remains focused on executing its business strategies from 2024 to 2027, supported by Malaysia’s National Energy Transition Roadmap (“NETR”) and the Energy Efficiency and Conservation Act (“EECA”), which came into force on 1 January 2025. These policy developments are expected to continue supporting demand for the Group’s core businesses in BMS, solar thermal and energy saving services, and solar PV systems. Malaysia’s continued development as a regional digital hub, including the expansion of data centres and smart building infrastructure, is also expected to support the adoption of energy-efficient building technologies.
As part of its solar PV strategy, the Group has commenced operations under the PPAmodel, whereby it undertakes the whole or partial upfront capital investment to design, supply, install and commission solar PV systems at customers’ premises, with recurring revenue generated over the 21-year PPA contract period. During Q2 FY2026, SDCG completed several solar PV system installations and commenced the generation and supply of electricity to customers.
The Group also continues to enhance its operating capabilities. During Q2 FY2026, SDCG obtained conditional approval for the building plan for the planned expansion of its headquarters in Kajang, Selangor, which is expected to increase the built-up area from 8,320 sq. ft. to approximately 14,000 sq. ft. The Group is also strengthening its BMS systems integration capabilities and integrating Internet of Things (“IoT”) and cloud-based features into its BMS, solar thermal and hybrid hot water systems to enable more effective real-time monitoring of energy consumption and carbon footprint.
Furthermore, SDCG’s strategic partnership with Solarvest Holdings Berhad supports access to broader green energy opportunities by combining SDCG’s specialised BMS capabilities with wider renewable energy solutions and cross-selling opportunities. The Group is also progressing the execution of its significant VRF contract worth over RM17.0 million, which is expected to be substantially completed within FY2026.
As at 30 June 2026, SDCG maintained a healthy balance sheet with cash and cash equivalents of RM33.20 million and low borrowings of RM0.24 million, providing the Group with financial flexibility to support ongoing project execution, the expansion of its operating capabilities and longer-term growth initiatives.
The Board remains optimistic on the Group’s prospects as SDCG advances its BMS, energy efficiency and renewable energy strategies while building a progressively broader mix of project-based and recurring income streams.
