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FRONTKEN CORPORATION BERHAD
(651020-T)
ANNUAL REPORT
2015
RESULTS OF OPERATIONS
in RM’000
REVENUE
EBITDA
2014
309,845
9%
2014
47,790
25%
2015
280,573
2015
35,625
NET PROFIT
EBITDA MARGIN as a % of revenue
2014
18,775
79%
2014
15.4
3%
2015
4,007
2015
12.7
REVENUE
The revenue for the Group for the financial year ended 31 December 2015 was RM280.6 million against RM309.8 million in
the previous year. Overall, the Group revenue decreased by RM29.3 million or 9.4% compared to the preceding financial year
mainly due to the completion of the project at Tanjung Bin.
REVENUE
(by customer location)
2015
RM’000
%
2014
RM’000
%
% change
in revenue
Taiwan
107,337
38
90,405
29
19
Singapore
35,263
13
42,740
14
-17
Malaysia
113,398
40
157,893
51
-28
Philippines
15,213
6
10,276
3
48
Others
9,362
3
8,531
3
10
Total
280,573
100
309,845
100
-9
An analysis of revenue by customer location showed growth in our business across the Group particularly in Taiwan and
the Philippines except for Singapore and Malaysia which declined by 17% and 28% respectively. The revenue in Singapore
decreased from RM42.7 million to RM35.3 million mainly due to decline in our customers’ business following the weakening
in market condition in the region. The reduction in turnover for our Malaysia business was mainly due to the lower revenue
recognition from the project in Tanjung Bin as the same was completed in the beginning of the third quarter of year 2015.
Other than the lower project revenue recognition, the Group’s other Malaysia business units showed a positive growth for
year 2015.
The revenue in Taiwan increased from RM90.4 million to RM107.3 million in year 2015 or a 19% increase compared to the
preceding financial year. The revenue growth in Taiwan was due to the positive growth of the semiconductor business. The
better performance for our subsidiary in Philippines was attributable to improved clientele coverage.
EARNINGS
Earnings before interest, tax, depreciation and amortization (“EBITDA”) of the Group for year 2015 decreased to RM35.6
million from RM47.8 million the year before. As a percentage of revenue, EBIDTA decreased by 3% which was mainly due
to lower revenue, higher expenses from the project in Tanjung Bin and loss on disposal of investment in a subsidiary. If we
were to exclude the cost overrun suffered in the Tanjung Bin project, the EBITDA for year 2015 would have been better than
that achieved in year 2014.
Lower depreciation of property, plant and equipment and net gain on foreign exchange had a positive contribution to the
Group’s net profit for year 2015. The depreciation and amortization of RM18.1 million in year 2015 was lower than that
recorded for last year’s RM18.4 million. The lower profit after tax of RM9.5 million compared to the RM23.2 million achieved
in year 2014 was mainly attributable to the higher project expenses recognised as discussed above.
FINANCIAL
REVIEW