Frontken Berhad Annual Report 2019

9 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2019 Chairman’s Message (cont’d) business, our transparency, the sustainability of our business and many more. In addition, the Group was also recognised for “Highest Growth and Profit After Tax Over Three Years” in its sector during The Edge Billion Ringgit Club annual event held in September 2019. Going beyond measures of revenue and profitability is our commitment to governance and sustainability, which remain key to our long-term business growth. As in previous years, our targets and initiatives are found in the Sustainability section of this Annual Report. We also continually explore options to further integrate environmental, social and governance (“ESG”) impact into our investment decisions and the way we do business. Semiconductor In 2019, the worldwide semiconductor industry sales decreased by 12.1% compared to the year before, as reported by The Semiconductor Industry Association. Although the industry’s numbers fell, our Group’s semiconductor business was up marginally, accounting for close to 80% of the Group’s total revenue. As one of the leaders in our industry, we hold many crucial assets that others will find very difficult to replicate including the ability to provide consistent and good quality results for our services and products. Furthermore, our scale, long and trusted relationships with customers, the strength of our partnership, our people and a trusted name goes a long way in cementing our reputation in the market. Our technology roadmap has always been aligned to support our customers’ requests and needs to ensure a profitable and successful partnership. Every year, we handled hundreds of thousands of big and small high precision kits and tools. The experience and insight we gain from this are what drives our continuous development that allows us to provide solutions to help our customers reduce their operating costs. We work on modernising and simplifying precision cleaning processes of tools without compromising on the quality of the end product to meet our customers’ increasing needs, such as a faster turnaround time, greater transparency, data collection and real-time documentation. We hope to benefit from the continued investments by our customers in producing smaller nodes chips to meet the demands of new technologies such as 5G, HPC and Internet of Things.Whilewe can look back onmany accomplishments, we are also conscious of the challenges ahead of us and the need to keep up with latest developments to remain relevant to our customers in the future. Engineering For the first time in many years, the Group engineering business accounted for a double-digit percentage of our total profit, driven by the gradual recovery of the oil and gas industry. At the same time, our costs were substantially reduced mainly due to improved production efficiencies and higher volume. As you would have noticed from my statement over the past few years, the Group’s engineering business had been very challenging, to say the least. Most operators have deferred maintenance and put off non-critical spending to reduce their costs. Until more recently, we saw an increase in activity levels with many new active enquiries as operators started to refocus their attention on equipment repair and maintenance.