Solar District Cooling Group Berhad (“SDCG”) an established provider of building management systems (“BMS”), solar thermal systems and energy-saving services, today announced its unaudited financial results for the first quarter ended 31 March 2026 (“Q1 FY2026”).
For Q1 FY2026, the Group recorded revenue of RM7.22 million, representing a 51.2% increase compared to RM4.77 million in the corresponding quarter of the previous financial year (“Q1 FY2025”).
The stronger revenue performance was mainly driven by higher contribution from the maintenance of other systems and equipment segment, which increased to RM4.17 million from RM0.07 million previously, primarily attributable to the commencement and progressive revenue recognition of the Variable Refrigerant Flow (“VRF”) project.
The increase was partially offset by lower revenue contribution from the Building Management Systems (“BMS”) segment, which declined to RM2.97 million from RM3.74 million in Q1 FY2025, mainly due to lower revenue recognised from existing project sites nearing completion, including the Ministry of Energy Transition and Water Transformation project.
The solar thermal systems and energy saving services segment also recorded lower revenue of RM0.09 million, following the completion of energy performance contracts in March 2025.
Gross profit for Q1 FY2026 stood at RM1.94 million, compared to RM2.35 million in Q1 FY2025, while gross profit margin moderated to 26.9% from 49.3% previously. The lower margin was mainly due to the lower-margin nature of the VRF project, higher BMS project costs, and softer contributions from the BMS and solar thermal segments during the quarter.
The Group recorded a loss before tax (“LBT”) and loss after tax (“LAT”) of RM0.48 million for Q1 FY2026, compared to profit before tax (“PBT”) of RM0.86 million and profit after tax (“PAT”) of RM0.68 million in Q1 FY2025.
The weaker bottom-line performance was mainly attributable to lower gross profit, higher staff costs following workforce expansion in the second half of FY2025, as well as professional fees incurred in relation to the proposed bonus issue of warrants and proposed employees’ share option scheme.
Compared with the immediate preceding quarter ended 31 December 2025 (“Q4 FY2025”), revenue decreased by 25.1% from RM9.64 million, mainly due to lower revenue recognition from existing BMS projects nearing completion, where progressive installation works for certain government-related projects and the Ampang Office Tower had been substantially recognised in Q4 FY2025.
Managing Director of SDCG, Mr. Edison Kong commented,
“Q1 FY2026 reflects the transitionary nature of our project cycle, where revenue growth was supported by the VRF project while margins were affected by project mix and cost factors. We remain focused on disciplined execution, strengthening our operating capabilities and building a broader platform across BMS, energy efficiency and renewable energy solutions.
The completion of several solar photovoltaic installations and commencement of electricity supply to customers during the quarter represent an important step in our recurring revenue strategy. Through the Power Purchase Agreement model, we are positioning SDCG to participate in long-term energy efficiency and clean energy opportunities while maintaining our foundation in core engineering and systems integration capabilities.”
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 stimulate demand for the Group’s core businesses in BMS, solar thermal and energy saving services, and solar photovoltaic (“PV”) systems.
As part of its solar PV strategy, the Group has commenced operations under the Power Purchase Agreement (“PPA”) model, 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 Q1 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 operational capabilities, including the planned expansion of its headquarters in Kajang, Selangor, the strengthening of its BMS systems integration capabilities, and the integration of Internet of Things (“IoT”) and cloud-based features into its BMS, solar thermal and hybrid hot water systems. These initiatives are aimed at enabling customers to monitor energy consumption and carbon footprint more effectively through real-time energy-saving analytics.
Furthermore, SDCG’s strategic partnership with Solarvest Holdings Berhad further supports its ability to access broader green energy opportunities, combining the Group’s specialised BMS capabilities with wider renewable energy solutions.
In addition, part of the Group’s initial public offering proceeds will support the execution of its significant VRF contract worth over RM17.0 million, which is expected to be substantially completed within FY2026.
As at 31 March 2026, SDCG maintained a healthy balance sheet with cash and cash equivalents of RM35.61 million and low borrowings of RM0.13 million, providing the Group with financial flexibility to support ongoing project execution and future growth initiatives.
