Frontken Berhad Annual Report 2018

9 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2018 Chairman’s Message (cont’d) Review of Financial Performance For FYE2018, the Group achieved another record breaking year with its best ever results with higher profitability on the back of a record revenue of RM327.2 million compared to RM296.6 million in FYE2017, a growth of 10.3%. The Group’s profit after tax increased by 56.6% to RM57.0 million from RM36.4 million compared to the preceding year. Our Earnings Before Interest Tax Depreciation and Amortisation grew by 42.5% to RM93.5 million from RM65.6 million a year ago. Our 2018 financial performance had been very encouraging for the Group and myself. The stronger results were a reflection of the hard work put in by everyone in the Group. This is a testament to our committed employees and our unwavering determination to never choose between the quality of services we provide and the profitability generated in our business. Our emphasis to consistently deliver high quality works and services to our customers were also the key determinants of our growth; which will continue to sustain our business in the future. Frontken Malaysia Frontken Malaysia reported an operating profit of RM4.97 million in FYE2018 from a revenue of RM58.1 million compared to RM0.6 million and RM50.3 million respectively in the preceding year, an improvement of 678.0% and 15.1% respectively. The Group’s semiconductor services operation in Kulim continued to deliver solid performance despite the challenging business environment. With a carefully thought out business strategy, we were able to retain our position as the largest precision cleaning service provider in the country; accounting for a very significant slice of the market share. The industry we cover ranges from semiconductor, photovoltaic, OLED, media as well as major semiconductor OEM contract manufacturers. The growth this year was mainly attributable to the rebound in the hard disk sector driven by stronger demand in the cloud computing business and also increased business from our customer involved in the production of wafer for LED chips. To better cater for the growth in our business, we added a new line in our Kulim facility. This new line will improve our efficiency and in turn reduce operating costs. The Group’s engineering business, Frontken (East Malaysia) Sdn Bhd (“FEM”) and TTES Frontken Integrated Services Sdn Bhd (“TFIS”) made modest progress in line with the overall recovery in this segment of our business. With the somewhat more stable crude oil price trading in an acceptable range, our business also saw some pick up during the second half of the year. We saw more activities during this period and we are hopeful that the worst may be behind us. We believe this positive momentum will carry through to 2019 and are hopeful that it will be a better year for our engineering business particularly if TFIS is able to secure some long- term service contracts from its customers. In East Malaysia, FEM was able to capitalise on the better operating environment and thus performed better compared to last year. With some of the potential works in the pipeline, we believe FEM will continue to thrive in 2019. The Group’s initiative to seek non-traditional approach in the oil and gas and also non-oil and gas industries; leveraging on available resources from other subsidiaries proved to have worked in reducing our fixed cost. Encouraged by this new strategy, we will continue to push forward with our efforts in reducing costs in the coming years.