Frontken eyes Taiwan expansion following improved 2Q earnings


FRONTKEN Corp Bhd is set to expand its capacity in Taiwan by building a new state of the art facility in anticipation of an increase in the demand for services relating to tools involved in the manufacturing of the most advanced chips. 

Frontken said in a bourse filing yesterday, its subsidiary in Taiwan has completed the acquisition of a building situated in Kaohsiung City and is expected to be operational next year in line with the proposed commercial production of the 3nm chips by its key customer there. 

Meanwhile, it is cautiously optimistic over a better performance for its oil and gas division, and will attempt to secure new orders in view of the strong Brent crude oil price recovery. 

“We believe our soon to be completed new facility in Pengerang, to support the contracts we have with our customers, will also help to contribute to the growth of our oil and gas division,” it said. 

The group will continue to strive for operational and cost efficiencies to better manage the ever-challenging operating environment moving forward while simultaneously being cautiously optimistic that its performance in the remaining months of the financial year will be satisfactory. 

Frontken’s net profit in the second quarter ended June 30, 2021 (2Q21) increased 21.69% year-on-year to RM24.74 million from RM20.33 million for the same quarter last year due to the group’s improved revenue. 

The group recorded a foreign currency exchange loss of RM0.7 million in the current quarter compared to a foreign currency exchange gain of RM0.1 million. 

“If we were to exclude the job support subsidy received last year and foreign currency exchange impact from the equation, the current quarter’s performance would have been 40.3% better than the preceding year corresponding quarter,” said Frontken. 

The group registered a loss per share of 1.57 sen from the much higher 1.94 sen last year. 

Revenue for the quarter grew by 24% to RM108.63 million from RM87.62 million mainly due to contributions by its subsidiaries in Taiwan, Malaysia and Singapore. 

“Volume in the semiconductor space picked up significantly due to higher demand and strong orders from one of our customers’ advanced node chips, which benefited our Taiwan subsidiary. 

“The group’s subsidiary in the Philip- pines also achieved an improved business performance due to new works secured,” it noted. 

Frontken declared a first single-tier dividend of 1.5 sen per share in respect of FY21.