Frontken Berhad Annual Report 2018

10 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2018 Chairman’s Message (cont’d) Frontken Taiwan - Ares Green Technology Once again, the Group’s subsidiary in Taiwan, Ares Green Technology Corporation (“AGTC”) emerged as our biggest contributor with a revenue of RM186.2 million, an increase of 8.6% compared to last year. This was equivalent to approximately 56.9% of the Group’s turnover. The operating profit also grew by 23.2% to RM49.4 million in comparison to the RM40.1 million achieved in 2017. The growth came mainly from the ramp up of production of the advanced node chip by our customers coupled with our ability to successfully deliver on our customers’ localisation project of some of the tools they used. This year we celebrated the 20th anniversary of AGTC; a year which saw many of our colleagues receiving their long- service awards and among them were services for over 10, 15 and 20 years. It was heartening to see so many of my colleagues achieving such milestones and for quite a number of them, this was their first job. It is such commitment and dedication that got us to where we are today. I hope they will stay with us for many more years to come in our journey to build a strong foundation for the future of not only AGTC but also the Group. The challenges within the semiconductor industry in Taiwan during the last few years had been immense but so have been the opportunities that we were presented with. It has always been our vision to set the industry’s standard in terms of excellent service and consistent quality so that we are the obvious choice for our customers when it comes to precision cleaning and other support services in the semiconductor industry. I believe we are making good progress in achieving our vision and today we are proud to be the preferred company and/or partner for our customers and OEM for the latest and most advanced technologies. However, we cannot be complacent and thus need to continue to invest in R&D so that we may continue to be ahead of our competitors particularly in the leading edge segment. At the same time, we will work closely with our customers on their localisation initiatives to further reduce their operational costs. We believe such initiatives will contribute to our growth in times to come. Together with our continuous investment in R&D, we aim to be ever ready, maximizing our capabilities with the cutting- edge technology that creates values and to support our customers’ evolving needs and rising expectations in the increasing demand of new technology nodes. Frontken Philippines TheGroup’s operation in the Philippines, FrontkenPhilippines Inc. (“FPI”) reported an operating profit of RM2.65 million on the back of a revenue of RM17.4 million. In spite of the reduction in our cleaning services for the solar panel industry, we were able to sustain our profitability through prudent cost management and growth in our engineering division. All in all, it was another successful year for FPI following its collaboration with strategic technology partners which benefitted the end-users and its partners. The hybrid model of global expertise and local content continues to be a desired direction for our customers. To that end, the Group intends to pursue this model and seek other complementing potential partners to further enhance the overall range of goods and services for our customers. The Group’s key markets in the Philippines will continue to be the oil and gas and power generation, which made up a bulk of its 2018’s revenue. A majority of the revenue breakdown indicates a growing demand for local manpower technical support for on-site activities; hence the need to focus on