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Semiconductor, O&G segments lift Frontken's 3Q net profit

KUALA LUMPUR (Nov 3): Frontken Corp Bhd registered a net profit of RM27.3 million for the third quarter ended Sept 30, 2021 (3QFY21), a 27.94% hike from RM21.34 million last year on higher revenue from both of its semiconductor as well as oil and gas (O&G) businesses.

As a result, earnings per share increased to 1.74 sen compared with 1.36 sen previously, said Frontken in a bourse filing Wednesday.

The company said its quarterly revenue rose 23% to RM116.59 million from RM94.79 million mainly due to significant contributions by its subsidiaries in Taiwan and Malaysia.

Its Taiwan semiconductor business continues to show significant growth in the quarter under review mainly due to the strong demand from its customers’ industry-leading advanced nodes chips.

“The improvement in our local business was largely due to new orders for provision of manpower supply and mechanical rotating equipment services from various contracts that the group has with the Petronas group of companies.

“Our subsidiary in Singapore recorded a slightly lower revenue compared to the preceding year corresponding quarter caused mainly by shortage in workforce and delay in our customers’ orders attributable to Covid-19 safety measures implemented by the government of Singapore,” said Frontken.

For the nine months ended Sept 30, 2020 (9MFY21), the group’s net profit grew 27.74% to RM74.96 million against RM58.68 million, while 9MFY21 revenue rose 22.99% to RM328.73 million from RM267.28 million a year ago.

On a quarter-on-quarter basis, Frontken registered a 10.37% increase in net profit from RM24.74 million in 2QFY21. Revenue in 3QFY21 was up by 7.33% compared with RM108.63 million in the immediate preceding quarter.

The group said it is cautiously optimistic for its prospects amidst the encouraging business developments. However, it noted that its financial performance for the remaining months in 2021 would be satisfactory.

Frontken said higher demand and strong orders from one of its customers’ advanced node chips has benefited the company’s semiconductor business.

“The customer has announced earlier this year their plans to invest US$100 billion over the next three years to ramp up production. The strong demand for our customer’s industry-leading technology advanced node chips and their significant investment for capacity expansion augurs well for our business growth in years to come. This has led us to the decision to also expand our production capacity. We recently announced the purchase of a new facility in Kaoshiung, Taiwan which we expect to be commissioned sometime during the second half of 2022.

“As for the oil and gas industry, we noticed robust improvement in our business due to new orders trickling in from the various umbrella contracts for provision of manpower supply and also mechanical rotating equipment services and parts that we have with the Petronas group of companies. We hope the momentum will pick up further in the fourth quarter of this year and throughout 2022 where our soon-to-be-completed new facility in Pengerang will be ready to support the contracts we have with our customers,” it said.

At Wednesday’s noon break, shares of Frontken were down by 1.3% or five sen at RM3.80 apiece, giving it a market capitalisation of RM6 billion.

The counter, however, has jumped 56% from RM2.43 on Jan 4.

http://www.theedgemarkets.com/article/semiconductor-og-segments-lift-frontkens-3q-net-profit

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