Frontken Berhad Annual Report 2019

12 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2019 Chairman’s Message (cont’d) now has a leaner organisation with a significantly lower cost base to better match the activities in the country. We also saw productivity improvements and increased capabilities through sharing of common resources within the Group to take advantage of lower costs offered by other business units. We were also qualified for more HVOF and other coating related processes by new customers and we are working hard to secure more long-term service agreements. We also explored new avenues such as setting up rotor inspection and storage program in a climate-controlled environment in our facility, to help ensure our customers’ critical rotors are maintained in prime condition. This will hopefully become a catalyst to generate other services and income stream to the business. While the primary goal of the transformation program is to ensure our business returns to sustainable financial health, we are continuously looking to develop a business model that are more resilient and stable. Frontken Philippines In 2019, Frontken Philippines Inc., reported an operating profit of RM2.4 million on the back of a revenue of RM16.1 million. We continued to offer our comprehensive services to all the industries that we serve by providing multi-skilled manpower to different locations nationwide to perform maintenance and repair of rotating and static equipment, fabrication of piping and structural assemblies, non- destructive testing inspections and many more specialised services. With our deep expertise and competent personnel in handling large-size machining, we were able to add new capabilities such as using Cold Metal Transfer Machine to support the restoration and repair activities and servicing of turbine and generator components for our customers. We have also initiated the “Power Team” and have started to put together a Quick Response Tool Van to attend and respond immediately to urgent requirements of all our customers. Looking forward With the uncertainty created by the Covid-19 pandemic, we believe that the market conditions will be challenging. However, we are still cautiously optimistic of being able to achieve some growth for our businesses. To that end, we are in the process of expanding our facility in Taiwan to better cater for the anticipated increased business from our customers. We expect the new cleaning lines to be ready sometime in the third quarter of 2020 and should start contributing to our bottom line in the fourth quarter of that year. We have already begun implementing strategies and initiatives and developing a pipeline that can deliver sustainable growth over the long term. To stay at the forefront of our industries, we will allocate capital where necessary, such as investing in our existing facilities including adding advanced metrology, testing and inspection equipment and introducing more automation to our processes with the view to ensuring consistent high quality end results. While we have not made any significant changes to our key policies, we remain committed to delivering sustainable shareholders’ return through both dividends and capital growth. We will continue to make prudent decisions in our investments and take appropriate steps to strengthen our growth potential and the value of our business, both organically and/or via mergers and acquisitions. Acknowledgement I would like to take this opportunity to thank our Board of Directors for its continuous guidance and steadfast support throughout the year. On behalf of the Board, I would also like to extend my sincere gratitude to our Senior Independent Non-Executive Director, the late Mr Aaron Sim Kwee Lein and deepest condolences to his family, for his long service and valuable counsel to the Group over the years. It has been a real honor and privilege to have made his acquaintance and worked with him. As announced in July, we welcome two new directors to our Board, namely Non-Executive Non-Independent Director, Mr Gerald Chiu Yoong Chian and Independent Non- Executive Director, Mr Ng Chee Whye, who bring with them tremendous experience and expertise to the Group. We look forward to their guidance and working with them. I would also like to take this opportunity to say many thanks to all my colleagues for their continued dedication and hard work during the year, without which we would not have gotten to where we are today. To our customers, suppliers, business associates, various ministries, government agencies and regulators of the countries in which we operate, we thank you again for the opportunity and trust that you have given to us. Lastly, I would also like to mark my appreciation to all our loyal shareholders and stakeholders, for your ongoing support and trust in us.