Frontken Berhad Annual Report 2020

Annual Report 2020 8 FRONTKEN CORPORATION BERHAD 200401012517 (651020-T) Dear Valued Shareholders, On behalf of the Board of Directors, I’m pleased to present to you the Annual Report and Audited Financial Statements of the Group for the financial year 2020 (“FY2020”). As part of this Annual Report, we have also included the Management Discussion and Analysis to provide our shareholders with a more insightful and informative details of the Group’s operations and performance. It had been an extremely challenging and unprecedented year, to say the least. Despite the many obvious challenges during the year, the Group recorded impressive growth in its top and bottom lines culminating in a stronger financial position and at the same time managed to achieve several record milestones. These achievements were particularly noteworthy in light of the very challenging business environment we were operating in. CHAIRMAN’S MESSAGE MANAGEMENT DISCUSSION AND ANALYSIS Review 2020 In FY2020, the Group achieved its highest ever revenue of RM368.3 million, an increase of RM28.4 million or 8% compared to financial year 2019 (“FY2019”). Profit before tax (“PBT”) was also at its record high of RM114.3 million, a RM18.0 million or 19% increase compared to the year before and the gross profit margin as a percentage to sales was at 45%. At the same time, the Group generated good free cash flow and ended the year with a strong net cash position of RM291.5 million. On the back of our strong earnings growth, the Company paid a single interim dividend of 1.2 sen per share and a second interim dividend of 2.8 sen per share bringing the total dividend of 4.0 sen per share for FY2020. To further reward our shareholders, the Company also proposed a bonus issue of shares and warrants on the basis of 1 bonus share and 1 bonus warrant for every 2 shares held by the shareholders. The year 2020 was one of the most challenging years, where governments, businesses and families were compelled to embrace a “new normal”. At the outset of the pandemic, the Group implemented its “Guidelines on Workplace Prevention and Control of COVID-19” to ensure minimal disruption to our businesses and to protect the safety of our employees and at the same time helped to contain the spread of the COVID-19 virus. As you all know in March 2020, we experienced the beginning of the lockdown and restrictions in our business units in Malaysia, followed by Singapore. Like many organisations and businesses across the world, we adapted quickly to remote working. We were in regular touch via virtual meetings with our stakeholders ranging from business partners, investors and our colleagues during that period. At the Group’s virtual executive team meeting, we discussed on the financial aspect as well as potential impacts amidst the ongoing pandemic. We also reviewed and implemented strategic measures including crisis management and business continuity plan in response to the same. We ensured that the services we provide remain as close to “business-as-usual” as possible, if not better, to ensure minimal disruption of our critical services to our customers. As the Group’s business fall under the category of essential services, we were able to resume full operation very quickly.