DEAR SHAREHOLDERS,

The global economy in 2025 and early 2026 continued to navigate a complex and volatile landscape. Higher material and labour costs, alongside cautious financing conditions, continued to exert pressure on operating margins within the Group, across the construction and infrastructure sectors.

Recently, geopolitical developments further intensified uncertainty in global markets. Escalating tensions in the Middle East, particularly around the Strait of Hormuz, which is a critical artery for global energy supply, triggered renewed volatility in oil prices and raised concerns over supply chain disruptions. At the same time, broadening trade frictions, including the continuation of the United States’ “Liberation Day” baseline tariffs on imports from several trading partners, have contributed to market volatility and heightened concerns over the reliability and cost of cross-border trade. These developments underscore the fragility of the global recovery and the ongoing challenges faced by trade-dependent economies such as Singapore.

To mitigate macroeconomic risks, we locked in contracts with suppliers and subcontractors where possible, helping to safeguard our operating margins against rising material prices, labour costs and financing expenses. At the same time, we implemented operational streamlining initiatives to enhance productivity and strengthen our core capabilities, while adopting innovative solutions to improve efficiency across our projects.

Our construction team remained focused on the smooth and timely delivery of ongoing projects, maintaining high standards of safety, quality and execution. Backed by our established track record and expertise in the infrastructure and construction sectors, the Group continued to benefit from the positive momentum in Singapore’s construction market. In 2025, we secured several public sector contracts, including the construction of intra-terminal tunnels at Changi Airport’s new Terminal 5 through an integrated joint venture with Penta-Ocean Construction.

I am also pleased to share that the Group currently maintains a healthy construction order book exceeding $1.1 billion, providing strong earnings visibility in the years ahead. Coupled with our strong financial position, supported by a resilient balance sheet, cash reserves of $114.3 million and a reduced net gearing ratio of 0.09x as at 31 December 2025, the Group remains well-positioned to capture opportunities while maintaining financial discipline.

OUR FINANCIALS

For FY 2025, the Group’s revenue increased 38.2% to $329.4 million from $238.4 million over the same corresponding year (“FY 2024”). Gross profit increased to $39.1 million in FY 2025 from $19.3 million in FY 2024. This was mainly due to improved gross profit margin from the Construction and Building Materials division, as well as the Real Estate division.

Other gains jumped 310.6% from $3.4 million in FY2024 to $14.0 million in FY2025, mainly due to net gain arising from the completion of the disposal of a land in Johor, Malaysia. This was partially offset by fair value loss on investment properties and unrealised foreign exchange loss on trade receivables and cash and bank balances arising primarily from the weakening of the United States Dollar against the Malaysia Ringgit from the Bio-Refinery and Renewable Energy segment.

Share of profit from associated companies and joint ventures decreased 43.0% to $3.0 million in FY 2025 from $5.2 million in FY 2024, due to lower contribution from a property development project held by a joint venture which was completed in 2024.

For FY 2025, the Group recorded a turnaround in profitability with a net profit attributable to shareholders of $18.6 million, from a net loss attributable to shareholders of $5.5 million in FY 2024.

Overall, the Group maintained a strong balance sheet with cash and bank balances of $114.3 million, with shareholders’ equity at $283.0 million as at 31 December 2025. The Group’s current ratio remains healthy at 1.03x with a net gearing ratio of 0.09x as at 31 December 2025 compared to 0.37x as at 31 December 2024.

The Group’s net asset value per share stood at 68.60 Singapore cents as at 31 December 2025, compared to 63.01 Singapore cents as at 31 December 2024.

CONSTRUCTION AND BUILDING MATERIALS

According to the projection by BCA on 22 January 2026, the total value of  construction contracts is expected to range between $47 billion and $53 billion in nominal terms in 2026. The average projected construction output at $44.5 billion in 2026 will be around 7% higher than the preliminary estimate of about $41.7 billion in 2025. This sustained construction demand expected in 2026 is supported by the expected awarding of additional construction packages for Changi Airport Terminal 5 (“T5”) Development, Marina Bay Sands Integrated Resort expansion, New Tengah General & Community Hospital, Downtown Line 2 and Thomson-East Coast Line Extensions. Over the medium-term, construction demand is projected by the BCA to reach an average of between $39 billion and $46 billion per year from 2027 to 2030.

Drawing on our 60 years of experience in the construction sector and the synergies provided by our Building Materials division, the Group is well-positioned to capture new opportunities arising from sustained public and private sector construction demand.

We remain focused on the timely execution of ongoing projects, including intra terminal tunnels of T5, Toa Payoh Integrated Development Hub, Multi-Storey Lorong Halus Bus Depot, Deep Tunnel Sewerage System Phase 2 and Tuas Water Reclamation Plant.

For FY2025, the Construction and Building Materials division reported a 43.1% increase in revenue from $224.3 million in FY2024 to $321.0 million in FY2025.  The revenue accounted for approximately 97.4% of the Group’s total revenue.

According to the latest data from the BCA, total demand for ready-mixed concrete in 2025 increased to about 14.5 million m3, from 13.3 million m3 in 2024. For 2026, the demand for ready-mixed concrete is projected to be between 15.0 million m3 and 16.0 million m3. Based on BCA’s medium-term outlook for construction
activity (including steady public housing programmes and rail and infrastructure developments), precast concrete demand is also expected to continue expanding, likely reaching between 2.5 million m³ and 2.8 million m³ in 2026.

Concurrently, we remain committed to strengthening our research and development efforts to deliver environmentally sustainable solutions that address the evolving needs of our customers, while supporting broader sustainability goals and long-term value creation.

The Group remains positive on the long-term outlook of the Edible & Non-Edible Oil Refinery segment, supported by the steady growth in global consumption of fats and oils driven by increasing demand from food, beverage and industrial applications. The global fats and oils market is projected to grow from USD484.1 billion in 2025 to USD646.1 billion by 2032 (CAGR: 4.21%), while the global vegetable oil market is expected to expand from USD258.5 billion in 2024 to USD446.5 billion by 2035 (CAGR: 5.10%). This expanding market presents continued opportunities for the Group to leverage its engineering expertise and established track record in delivering solutions for vegetable oil processing.

In parallel, the global transition towards environmental sustainability presents growth opportunities for the Group’s Renewable Energy segment. Biodiesel mandates in Indonesia and Malaysia, as well as the increasing adoption of Sustainable Aviation Fuel (“SAF”), are expected to drive demand for related infrastructure and processing capabilities. With its experience in designing and delivering plants capable of treating palm oil mill effluent (“POME”) and other vegetable oil-based feedstock in compliance with International Sustainability & Carbon Certification (“ISCC”) standards, the Group is well positioned to capture opportunities across the renewable fuels and SAF value chain.

REAL ESTATE

On the property development front, the latest statistics from the Urban Redevelopment Authority indicate that prices of private residential properties rose by 0.6% in the fourth quarter of 2025, compared with a 0.9% increase in the prior quarter, underscoring a moderation in price momentum towards the end of the year. For the whole of 2025, the overall private residential price index increased by 3.3%, marking the smallest annual gain since 2020 as market growth continued to temper amid broader economic headwinds.

Given the uncertain macroeconomic environment, the Group expects the private residential market to remain challenging. Moving forward, we will continue to adopt a prudent and selective approach in replenishing our land bank. In 2025, our Real Estate Division recorded a lower revenue of $5.2 million in FY2025, compared to $10.5 million in FY2024.

LEISURE & HOSPITALITY

Our Leisure and Hospitality Division recorded revenue of $3.2 million in FY2025, compared to $3.6 million in FY2024. According to the Singapore Tourism Board
(“STB”), international visitor arrivals to Singapore rose to 16.9 million in 2025, up 2.3 per cent from 2024. STB projects 17 million to 18 million visitors in 2026, generating $31.0 billion to $32.5 billion in receipts, focusing on new experiences and Tourism 2040 goals. Building on this positive outlook, we expect our Leisure and Hospitality Division to continue contributing positively to the Group’s performance.

INTERIM, FINAL AND SPECIAL DIVIDENDS

Koh Brothers Group celebrated our 60th anniversary this year, marking a significant milestone in our journey. In recognition of our improved financial performance and to thank our shareholders for their loyal support over the years, the Board of Directors have proposed a final dividend of 0.30 Singapore cents per ordinary share and a special dividend of 0.60 Singapore cents, subject to shareholders’ approval at the upcoming Annual General Meeting. Together with the interim dividend of 0.10 Singapore cents declared in 1H 2025, total distributions will be 1.0 Singapore cents in cash per share for FY 2025.

SUSTAINABILITY

Recognising the built environment’s vital role in addressing climate change, the Group continues to embed sustainability at the core of our business strategy and operations. As Singapore advances its transition towards a low-carbon and resilient economy, we remain committed to adapting to evolving market expectations while safeguarding long-term business viability.

By prioritising responsible practices, the well-being of our people and the communities we serve, we strive to deliver sustainable value for our stakeholders and contribute positively to Singapore’s built environment.

ACKNOWLEDGEMENTS

The Board would like to express its sincere gratitude to the late Mr Koh Tiat Meng, Koh Brothers’ Founder and Executive Chairman, who passed away on 8 July 2023, for his foresight, strong leadership, commitment and contributions. The late Mr Koh was instrumental in strategically expanding the Group’s businesses and spearheading business activities into China, Malaysia, Indonesia and Vietnam.

On behalf of the Board of Directors, I would also like to take this opportunity to record our sincere appreciation to our stakeholders, clients, business associates, partners, shareholders, and employees for their continued support. Looking ahead, we will continue to stay prudent, innovative, enterprising, quality conscious and flexible in responding to new changes and challenges.