Frontken Berhad Annual Report 2017

13 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2017 Financial Review (cont’d) The consolidated net profit attributable to shareholders of the Company for FYE2017 was RM29.9 million, an increase of RM9.8 million or 49% compared to the net profit attributable to shareholders of RM20.0 million for the preceding financial year was mainly due to better performances by our non-wholly owned subsidiary and the increase of the Group’s equity interest in the subsidiary in Taiwan. This translated to basic earnings per share in FYE2017 of 2.85 sen compared to basic earnings per share of 1.91 sen in the previous financial year. CASH FLOWS in RM’000 NET DEBT WORKING CAPITAL 2016 (65,287) 43% 2016 130,255 2% 2017 (93,235) 2017 133,327 FREE CASH FLOW CAPITAL EXPENDITURE 2016 16,882 190% 2016 27,901 28% 2017 49,015 2017 20,152 The free cash flow increased from RM16.9 million to RM49.0 million in FYE2017 mainly due to higher net cash generated from operations and lower capital expenditure in relation to the plant expansion of our subsidiary in Taiwan compared to the preceding financial year. The net cash from operating activities was RM69.0 million and RM44.4 million in year 2017 and 2016 respectively. The net cash outflow for financing activities was RM8.4 million in year 2017 as compared to RM18.5 million in year 2016. The decrease was due to higher loan repayment in year 2016 as compared to dividend payment in year 2017. Net cash used for investing activities decreased from RM35.0 million in the preceding financial year to RM32.1 million in year 2017. The decrease in cash outflow for investing activities was mainly due to lower capital expenditure, disposal of investment in cash management fund and additional investment in a subsidiary in Taiwan in year 2017. Our Group has cash and cash equivalent of RM120.3 million as at the end of year 2017 compared to RM98.1 million as at the end of year 2016. The Group will continue to exercise prudence in cash flow management while conserving the cash for potential future expansion and investing activities. FINANCIAL POSITION The Group’s shareholders’ fund improved from RM261.6 million as at 31 December 2016 to RM281.6 million as at 31 December 2017 due to increase in retained earnings. Total assets of the Group increased from RM407.8 million as at 31 December 2016 to RM431.1 million as at 31 December 2017. Total Group’s liabilities of RM125.1 million as at 31 December 2017 were higher by RM12.8 million or 11% compared to the previous year. The Group’s borrowings increased from RM29.3 million in year 2016 to RM33.8 million in year 2017 due to short term borrowings during the financial year. The total Group’s borrowings as at 31 December 2017 that is repayable within one year is 65%. Singapore Dollar borrowings represented 65% of the total borrowings whilst borrowings denominated in Taiwan Dollars and Ringgit Malaysia made up 28% and 7% of the total borrowings respectively. Foreign currency borrowings were drawn to hedge against our Group’s overseas investments and receivables which were denominated in foreign currencies.