Frontken Berhad Annual Report 2018

14 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2018 Financial Review (cont’d) CASH FLOWS in RM’000 NET DEBT WORKING CAPITAL 2017 (93,235) 33% 2017 133,327 35% 2018 (124,144) 2018 179,499 FREE CASH FLOW CAPITAL EXPENDITURE 2017 49,015 16% 2017 20,152 51% 2018 56,907 2018 9,892 The free cash flow increased from RM49.0 million to RM56.9 million in FYE2018 mainly due to 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 RM63.3 million and RM69.0 million in year 2018 and 2017 respectively. The net cash outflow for financing activities was RM27.8 million in year 2018 as compared to RM8.4 million in year 2017. The increase was mainly due to higher loan repayment and dividend payment in year 2018 as compared to the preceding financial year. Net cash used for investing activities decreased from RM32.1 million in the preceding financial year to RM7.1 million in year 2018. The decrease in cash outflow for investing activities was mainly due to lower capital expenditure and lower additional investment in a subsidiary in Taiwan in year 2018. The proceeds from disposal of an associate in year 2018 also contribute to the decrease in net cash used for investing activities. Our Group has cash and cash equivalent of RM148.9 million as at the end of year 2018 compared to RM120.3 million as at the end of year 2017. 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 RM281.6 million as at 31 December 2017 to RM325.0 million as at 31 December 2018 due to increase in retained earnings. Total assets of the Group increased from RM431.1 million as at 31 December 2017 to RM455.1 million as at 31 December 2018. Total Group’s liabilities of RM110.4 million as at 31 December 2018 were lower by RM14.7 million or 12% compared to the previous year. The Group’s borrowings decreased from RM33.8 million in year 2017 to RM13.7 million in year 2018. The total Group’s borrowings as at 31 December 2018 that is repayable within one year is 35%. Taiwan Dollar borrowings represented 65% of the total borrowings whilst borrowings denominated in Singapore Dollar and Ringgit Malaysia made up 19% and 16% 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.