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FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT
2015
AGTC’s advanced research and development experience and
capabilities has enabled the company to deliver evolving processes,
engineering solutions and product quality. AGTC commands a
sizable market share in the industry, which has supported its strong
and stable growth over the years. Moving forward, the management
is cautiously confident that it will continue to enjoy constant growth
for the company in view of the increasing dependency and usage of
the Internet-of-Things and the ever-evolving mobile market.
Frontken Philippines, which provides total integrated engineering
solutions to the power, oil and gas, manufacturing, utilities, food,
automotive and mining industries delivered a revenue growth of
47.0% with RM15.1 million. Supported with a total of 2900 square
meters of operating facilities, Frontken Philippines serves major
industry players in the Philippines. Despite a challenging economy
during FYE2015, Frontken Philippines increased its number of
completed projects from 69 in FYE2014 to 89 for FYE2015, which
was reflected in its profit growth to RM3.1 million from RM1.6
million. During the year, the company had rapidly expanded its
workforce to 57 professional technicians from 13 in 2014 to cater
for the increasing demand from its existing clients and potential new
projects that are anticipated for in 2016.
Frontken Singapore continued to be impacted by the decline in the
oil and gas sector that affected the global market. The continual
increase in labour costs and government’s initiatives to reduce
dependency on foreign workers running in parallel to increasing
levies does not help our business. On the back of the very tough and
dire year, Frontken Singapore delivered a revenue of RM48.0 million,
falling short of last year’s revenue of RM58.6 million.
To counter the market storm and tough business environment, the
companyhas restructuredand realigned itsbusinessstrategiesduring
the financial year under review. Frontken Singapore streamlined
its resources, merged and strengthened its technical platform by
partnering with TFIS in tendering and securing projects. Working
together as a Group has placed us higher on the industry scale and
enabled us to offer a broader spectrum as a one-stop solution. As
a result of our combined capabilities, Frontken Singapore secured
a repair project from Hitachi. This was a significant achievement for
MANAGEMENT DISCUSSION
AND ANALYSIS
OVERVIEW
Frontken, equipped with twenty years of industry
experience in providing its clients with innovative
engineering and technology is the leading
provider of surface metamorphosis, chemical and
mechanical engineering solutions. The Group’s
business facilities across the Asia Pacific region
offers excellent technical expertise and solutions
to key industry players in the oil and gas, power
generation, petrochemical, semiconductor, marine
industries and many more.
Frontken’s competitive edge emanates from its
commitment to quality and its investment in research
and development to provide solutions in delivering
maximum results. Well equipped with state-of-the-
art technology and a team of committed skilled
professionals, Frontken has both the capabilities
and infrastructure to provide its broad spectrum of
clients with a one-stop solution.
PERFORMANCE REVIEW
For the financial year ended 31 December 2015
(“FYE2015”), Frontken reported a revenue of
RM280.6 million as compared to RM309.8 million
in the last financial year ended 31 December 2014
(“FYE2014”). The Group’s profit before tax (“PBT”) of
RM16.0 million and profit after tax (“PAT”) of RM9.5
million reflected a lower performance as compared
to RM28.1 million and RM23.2 million respectively
for FYE2014. Frontken’s FYE2015 profit was
adversely affected mainly by the higher expenses
incurred from our ATB project that was handed
over in July 2015. This was further exacerbated by
the writing off and impairment of assets combined
with the loss on disposal of our Hong Kong and
China subsidiaries, Frontken MIC Co. Limited and
Frontken-MIC (Wuxi) Co. Ltd.
For the financial year under review, the Group had a
realised foreign currency gain amounting to RM2.9
million.
For FYE2015, Taiwan remains to be our key
profit contributor to the Group with a revenue
of RM108.7 million, representing an increase of
18.7% as compared to FYE2014. Ares Green
Technology Corporation (“AGTC”) is the leading
advanced technology company in Taiwan that
pioneered the advanced precision cleaning and
surface metamorphosis technology. Headquartered
in Tainan with engineering facilities in Hsinchu,
Taichung and Tainan, AGTC is supported with over
355 employees leading the semiconductor service
business in Taiwan.