Frontken Berhad Annual Report 2017

9 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2017 Chairman’s Message (cont’d) our work quality and strengthen our position in the target industry the world over. Our clients have benefited from the Group’s investment in new technology and solutions which have enabled them to also efficiently increase their product shelf life/cycle. At an organisational level, this involved a whole new area of work, including training, among other things, equipping staff with the right tools, encouraging and empowering them. This is all part of our transformation journey towards achieving the true potential of our business. The semiconductor industry worldwide growth soared impressively and according to the Semiconductor Industry Association (SIA), the global semiconductor sales totalled USD412.2 billion in 2017, the industry’s highest-ever annual sales. This resulted in the Group’s semiconductor divisions in Taiwan and Singapore achieving a strong improvement in their businesses with an increase in revenue of 33.8% and 24.7% respectively compared to the preceding year. However, the same cannot be said for the oil and gas industry where most key players were more vigilant in their investment for exploration, production and maintenance activities due to the volatile oil prices as a result of weaker demand throughout the world. Despite considerable efforts, the insipid oil and gas market adversely affected the performance of our engineering division. Review of Financial Performance For FYE2017, the Group’s enjoyed its best ever results with higher profitability on the back of a revenue of RM296.6 million as compared to RM261.8 million in FYE2016, an improvement of 13.3%. As a result, the Group’s profit after tax grew by 33.3% to RM36.4 million from RM27.3 million a year ago. Our Earnings Before Income Tax Depreciation and Amortisation also rose by 27% from RM51.6 million to RM65.5 million. The year on year increase in revenue was the result of exceptional performance from the Group’s subsidiaries in Taiwan and Singapore. This outcome was also largely driven by improved cost performance and initiatives to further enhance our facilities which were broadly in line with the growth of the semiconductor industry. Frontken Malaysia Frontken Malaysia recorded a lower operating profit of RM0.6 million in FYE2017 from a revenue of RM50.3 million, compared to RM7.2 million and RM68.0 million respectively the year before. The Group’s operation in Kulim continued to perform respectably in a fairly stable market. While the semiconductor industry in Malaysia remained robust throughout FYE2017, the fiscal consolidation was also supported by the rebound in the Hard Disk industry which experienced an increase in revenue with growth averaging around 28%. This led to a strong end to the year, which was boosted by a marked strengthening demand for semiconductor in the region.