Frontken’s net profit up 12% YoY

by NUR HAZIQAH A MALEK / pic by BLOOMBERG

FRONTKEN Corp Bhd registered 12% year-on-year (YoY) increase for its net profit to RM21.34 million for the third quarter ended Sept 30, 2020 (3Q20), compared to RM19.05 million posted in the same quarter last year, driven by significant improvement from its semiconductor division.

Frontken in a filing to the stock exchange yesterday noted that this performance had been its best as revenue increased 8.9% to RM94.79 million from RM87.05 million last year.

“The group’s revenue for the current quarter increased by approximately RM7.7 million (8.9%) compared to the preceding year corresponding quarter mainly contributed by our subsidiaries in Taiwan and the Philippines.

“Our Taiwan’s unit benefitted from the pick-up in volume in the semi-conductor space due to higher demand and strong orders from one of our customers’ advanced node chips,” it noted.

The company noted that it could have achieved a better quarter earnings-wise, but declines in its oil and gas (O&G) division in both Malaysia and Singapore had marginal impact.

“It is worth mentioning that this was our best ever quarter performance; more noteworthy in light of the global slowdown caused by the Covid-19 pandemic.

“We were able to achieve this because of the significant profit after tax improvement of 39.1% from our semi-conductor division compared to the preceding year corresponding quarter,” it noted in the financial report.

The year-to-date net profit was at RM58.68 million versus RM50.97 million, and revenue stood at RM267.28 million against the previous RM251.02 million.

“The performance would have been better, but the indirect impact from the Covid-19 pandemic hit our O&G division particularly hard,” it noted.

Moving forward, the group foresees the overall business conditions for O&G segment will remain uncertain due to heightened concerns on the potential new wave of the pandemic.

New orders, however, are trickling from its various umbrella contracts for provisions of manpower supply and mechanical rotating equipment services and parts it has with the Petroliam Nasional Bhd.

“We hope this momentum will pick up further in 4Q20 and hopefully throughout 2021,” it said.