KUALA LUMPUR (Feb 23): Frontken Corp Bhd’s net profit improves marginally to RM29.84 million in the fourth quarter ended Dec 31, 2022 (4QFY2022) from RM29.55 million in the same quarter a year earlier due to foreign currency exchange loss and its plant operational costs.

Earnings per share increased to 1.90 sen from 1.88 sen, according to its Bursa Malaysia filing on Thursday (Feb 23).

The group's 4QFY2022 revenue increased 11% year-on-year to RM135.27 million from RM121.49 million, due to better contributions from its subsidiaries in Taiwan, Malaysia and Singapore.

The semiconductor support provider declared a second single-tier dividend of 2.6 sen per share for its financial year ended Dec 31, 2022 (FY2022), with the entitlement and payment dates to be announced at a later date.

Frontken further stated that its net profit was offset by foreign currency exchange loss of RM2.5 million from its gain of RM2.3 million in 4QFY2021. Additionally, its new facility at Kaohsiung City, Taiwan, has an operational cost of approximately RM4.2 million.

The increased revenue was due to the improvement in the group’s local business due to a pick-up in orders for its maintenance and repair services of mechanical rotating equipment and manpower supply through various contracts it has with the Petronas group of companies.

“Our Taiwan semiconductor business continued to benefit from the higher demand in the semiconductor space,” said the group, adding that its engineering division in Singapore also saw an increase in its activities, partly attributable to the improvement in the oil and gas industry.

For FY2022, the group’s net profit was 18% higher at RM123.3 million compared to RM104.5 million a year prior as a result of higher revenue and strict cost management.

Meanwhile, revenue contributions for FY2022 also rose 15% to RM517.18 million from RM450.22 million due to its subsidiaries’ contributions, with Malaysia bringing in RM88.85 million for the year.

On its prospects, the group said it is cautiously optimistic that the positive momentum will carry through to 2023 due to increased orders from various contracts from the oil and gas industry.

“To that end, we are cautiously optimistic that our performance will be satisfactory. We will continue to be vigilant in our cost management and continually explore ways to improve on our production efficiency,” said Frontken in a statement.

“Our priority will be to continue to focus our attention on the quality of our services and efficiencies so as to maintain our competitiveness.”

At the time of writing, Frontken’s share price rose 11 sen or 3.63% to RM3.14, giving it a market capitalisation of RM4.96 billion.