Frontken Berhad Annual Report 2019

14 Frontken Corporation Berhad (651020-T) ANNUAL REPORT 2019 Financial Review (cont’d) CASH FLOWS in RM’000 NET DEBT WORKING CAPITAL 2018 (124,144) 60% 2018 179,499 29% 2019 (198,929) 2019 232,279 FREE CASH FLOW CAPITAL EXPENDITURE 2018 56,907 90% 2018 9,892 28% 2019 107,884 2019 7,146 The free cash flow increased from RM56.9 million to RM107.9 million in FYE2019 mainly due to higher cash generated from operations, enhance working capital management and lower capital expenditure compared to the preceding financial year. The net cash from operating activities was RM114.9 million and RM63.3 million in year 2019 and 2018 respectively. The net cash outflow for financing activities was RM33.7 million in year 2019 as compared to RM27.8 million in year 2018. The increase was mainly due to higher dividend payment in year 2019 as compared to the preceding financial year. Net cash used for investing activities increased from RM7.1 million in the preceding financial year to RM12.1 million in year 2019. The increase in cash outflow for investing activities was mainly due to higher placement of fixed deposits. The proceeds from disposal of an associate and property, plant and equipment in year 2018 also contributed to the lower net cash used for investing activities in 2018. The Group has cash and cash equivalents of RM219.7 million as at the end of year 2019 compared to RM148.9 million at the end of year 2018. Amid the challenging business conditions, the Group will continue to exercise prudence in cash flow management while conserving the cash for potential future expansion and investing activities. FINANCIAL POSITION The Group’s shareholders’ fund improved from RM325.0 million as at 31 December 2018 to RM377.0 million as at 31 December 2019. Total assets of the Group increased from RM455.1 million as at 31 December 2018 to RM515.7 million as at 31 December 2019. Total Group’s liabilities of RM117.0 million as at 31 December 2019 were higher by RM6.6 million or 6% compared to the previous year mainly due to higher lease liabilities from the initial application of MFRS 16. The Group’s borrowings as at 31 December 2019 are denominated in Singapore Dollar and repayable within one year. Foreign currency borrowings were drawn to hedge against the subsidiary business and receivables which were denominated in Singapore Dollar.