Frontken posts record net profit to RM52mil on improved revenue

PETALING JAYA: Semiconductor firm Frontken Corp Bhd has posted a record 75% year-on-year growth in net profit to RM52.26mil for the financial year ended Dec 31, 2018 (FY18).

This was mainly attributed to improved revenue, vigilance in cost management and a small gain on disposal of an associate.

Group revenue for FY18 amounted to RM327.2mil, representing a 10.3% increase from the preceding year, due to the better performance of the group’s subsidiaries in Singapore, Malaysia and Taiwan.

“Year-to-date revenue from our subsidiaries in Singapore, Malaysia and Taiwan rose 17.1%, 14.9%, and 8.6% respectively, compared with the preceding year.

“This was consistent with the report issued by Semiconductor Industry Association (SIA) on the overall growth in the semiconductor industry, which had directly benefitted the group’s performance,” said Frontken.

Its board of directors yesterday declared a second interim single tier dividend of 0.8 sen per share in respect of FY18, with entitlement and payment dates to be announced at a later date.

SIA announced that the global semiconductor industry had posted sales of US$468.8bil in 2018, the industry’s highest-ever annual total, an increase of 13.7% compared with the 2017 total sales.

While market growth slowed during the second half of 2018, SIA is of the view that the long-term outlook of the industry remains strong.

Going forward, the projected global growth has somewhat weakened with the revised world economy projected to expand 3.5% in 2019 and 3.6% in 2020, 0.2% and 0.1% below the October 2018 World Economic Outlook forecast.

Amid the uncertainties in future trade policy of the United States, as well as the economic performance of Europe and China, Frontken anticipated that the overall business conditions in 2019 would continue to be challenging.

“To that end, we will continue to focus our attention on the quality of our services and cost management so as to maintain our competitiveness.

“We believe that our subsidiaries in Taiwan, Singapore, Malaysia and the Philippines would be able to continue with their momentum,” said Frontken.

Frontken closed 4% higher at 90.5 sen, traded on a volume of 38.89 million shares yesterday.