Frontken posts RM26.5m net profit for 1Q22

by S BIRRUNTHA / graphic by TMR

FRONTKEN Corp Bhd’s net profit for its first quarter ended March 31, 2022 (1Q22) rose to RM26.52 million from RM22.91 million a year ago driven by improved revenue and better profit margin resulting from the continual efforts to improve efficiency across the group.

Quarterly revenue expanded by 15.1% to RM119.15 million from RM103.52 million previously, mainly due to bigger contributions by our subsidiaries in Taiwan and Malaysia. 

Frontken noted that volume in the semiconductor space picked up significantly due to higher demand and strong orders from one of its customers’ advanced node chips which benefitted its Taiwan subsidiary.

“The improvement in our local business was largely due to new orders for provision of manpower supply and mechanical rotating equipment services from various contracts that the group has with the Petronas Group of Cos,” it said in a filing to Bursa Malaysia today.

The group registered a higher earnings per share (EPS) of 1.69 sen for the period against 1.46 sen previously.

Frontken did not declare any dividend for the current quarter ended March 31, 2022.

On prospects, Frontken said it achieved another remarkable 1Q22 compared to the preceding year corresponding period mainly attributable to the significant growth in our semiconductor business.

It added that the World Semiconductor Trade Statistics (WSTS) predicted that the global semiconductor market is projected to grow by 8.8% in 2022, to US$601 billion (RM2.63 trillion), driven by double-digit growth of the sensors and logic category. 

“All regions and all product categories are expected to continue positive growth. Consequently, wafer foundries sales are likely to remain strong due to tight supply caused by limited capacity. 

“We believe that the projected substantial increase in production by the semiconductor companies and persistent high demand of chips will be positive for our business in years to come,” it noted.

As for the oil and gas (O&G) industry, the group is cautiously optimistic that its business will be stronger compared to last year due to increased demand partially caused by disruption in the global O&G supply.

The group added that it will continue to drive operational and cost efficiencies to better manage the challenging operating environment.

At 3pm, Frontken traded six sen higher to RM2.58.