Frontken Berhad Annual Report 2017

10 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2017 Chairman’s Message (cont’d) The Group’s oil and gas division, TTES Frontken Integrated Services Sdn Bhd (“TTES”) continued to be challenged by the weak oil price. The lagging in recovery is expected as clients continued with their push to reduce their operating cost. The shrinking market coupled with our competitors chasing for a slice of a smaller pie only made things worse. However, we were not deterred by the tough operating environment and instead sought non-traditional market approach in the oil and gas industry; leveraging on available resources within the Group. We managed to make some progress in the power industry and also established relationship with several established pumps’ OEM. To that end, TTES made some plans for upgrading some of its facilities and equipment in order to pre- position itself to be ready to respond to eventual market recovery. In East Malaysia, our subsidiary, Frontken (East Malaysia) Sdn Bhd, fared better with increased revenue from new customers as well as from non-oil and gas related services. FRONTKEN TAIWAN The Group’s subsidiary in Taiwan, Ares Green Technology Corporation (“AGTC”) again emerged as our best performing unit in 2017 with a revenue of RM171.4 million, a 33.8% increase compared to the prior year. The operating profit also grew to RM40.1 million, a 67.4% jump from FYE2016. With the investment we made in 2016 and 2017, AGTC was able to equip itself with the latest and most advanced technology to better serve its customers. Consequently, it is now considered to be one of the best “state-of-the-art” facilities in the world that is future ready. Together with our portfolio of partners, we are strategically positioned to propose methods to identify issues, provide solutions and improve our customers’ productivity. The Group’s investment in R&D has resulted in it being able to produce leading-edge technology to support our clients increasingly more complex processes in the production of lower new technology nodes. The Group’s proactive initiatives and well-placed operation in Taiwan made it one of the leading suppliers in that country and its outstanding core competency is comparable amongst its global peers, if not better. FRONTKEN PHILIPPINES The Group’s operation in the Philippines, Frontken Philippines Inc. achieved an operating profit of RM2.6 million from a revenue of RM17.5 million in FYE2017. The oil and gas operations in the Philippines has been resilient despite the challenges, mainly cushioned by some projects secured in FYE2017.