Frontken Corporation Berhad 200401012517 (651020-T) • ANNUAL REPORT 2023 19 CASH FLOWS IN RM’000 353,885 NET CASH 27% 2022 2023 90,238 129,890 FREE CASH FLOW 44% 2022 2023 52,660 15,244 CAPITAL EXPENDITURE 71% 2022 2023 319,727 411,473 WORKING CAPITAL 2022 2023 29% 277,883 FINANCIAL REVIEW (CONT’D) An analysis of revenue by customer location showed weaker demand from our customers in Taiwan and Singapore, resulting from a slowdown in the global semiconductor market. The improvement in the Group’s local business was largely due to increased orders from the various contracts for the provision of engineering services, manpower supply and also mechanical rotating equipment services and parts that the Group has with the oil majors. EARNINGS The Group’s earnings before interest, tax, depreciation and amortisation (“EBITDA”) for FY2023 was RM4.8 million or 3% lower than that achieved in the preceding year mainly due to lower revenue from our subsidiaries in Taiwan and Singapore. The free cash flow increased by RM39.7 million to RM129.9 million in FY2023 mainly due to higher cash flow generated from operating activities and lower capital expenditure. The net cash generated from operating activities in FY2023 increased to RM144.0 million. Net cash used for investing activities decreased by RM50.0 million to RM8.7 million in FY2023 due to lower capital expenditure. The net cash outflow of RM71.8 million for financing activities consists mainly of repayment of money market loan and payments of dividends. The Group cash and cash equivalents increased from RM327.4 million to RM404.4 million as of 31 December 2023, which will provide the Group with financial flexibility to fund future growth initiatives. Compared to last year, the profit after tax for the Group decreased by 8% mainly due to lower revenue and higher withholding tax imposed on the dividend declared by Taiwan subsidiary. If the Group were to exclude the withholding tax and foreign currency exchange impact from the equation, for a like-for-like comparison, the current year’s performance would have only been 2.5% lower than the preceding year; a very commendable performance under very challenging operating environment for the space the Group operates in. The consolidated net profit attributable to shareholders of the Company for FY2023 decreased by RM11.3 million or 9% compared to the preceding year. This Group’s basic earnings per share decreased from 7.8 sen to 7.1 sen for FY2023. FINANCIAL POSITION The Group’s shareholders’ fund improved from RM548.5 million to RM641.2 million as of 31 December 2023, an increase of 17%. The Group’s total assets were RM885.4 million as of 31 December 2023, an increase of RM79.6 or 10% from RM805.8 million a year ago. It was primarily due to the increase in the Group’s cash and bank balances and fixed deposits with licensed banks by RM56.5 million and the increase in short-term investments by RM20.7 million. The Group’s liabilities decreased by RM20.4 million to RM197.5 million as of 31 December 2023 mainly due to the repayment of the money market loan.
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