Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2023 15 Frontken Malaysia (“FMSB”) – Our precision cleaning business in Malaysia comes under FMSB which operates in Kulim, Melaka and Kuching. FMSB was not spared from the downturn in the semiconductor industry. In the face of these challenges, we remain focused in navigating the same by finding ways to reduce operating costs, providing innovative solutions and adding value to our services. Having said that, the performance of FMSB improved marginally with better revenue and bottom line compared to a year ago. The improved bottom lines was mainly due to continual cost saving efforts including identifying inefficiencies in production and streamlining our inventories. Our foundry customer that are involved in the production of chips for the automotive segment are reportedly expanding their capacity to cater for the higher demand by their end customers. It was announced that they are investing billions of ringgits in Kulim Hi-Tech Park to increase their wide-bandgap chips production capacity. Consequently, we have also made the necessary investment to meet the expected additional demand from our customer and we will continue to do so should the need arises. We are excited with all these new developments which will augur well for our precision cleaning business in Malaysia. ENGINEERING DIVISION In FY2023, our engineering divisions performance had been exceptional, with profits hitting record level in spite of the usual challenges in the oil and gas (“O&G”) industry. Over the last decade, the O&G industry had experienced significant volatility alongside global geopolitical tensions. The COVID-19 pandemic has also plunged the global crude oil price into one of its lowest in recent years. Thankfully, our business gradually gained momentum in 2022 and 2023 as a result of improved activities in this segment which in turn contributes to a much-improved bottom line to our business in this segment. With a mix of bullish and bearish views on O&G, we believe our business in this segment will continue to fluctuate depending on the market condition. However, with our many years of experience and our long-term strategy, we are cautiously optimistic, that this segment will continue to contribute positively to our Group’s performance in the coming year. Palinpinon HP Diaphragm Repair CHAIRMAN’S MESSAGE (CONT’D)
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