11 / 144
The Group’s oil and gas and utilities
operations in the Philippines, however,
were affected by deferred projects
during the year.
Frontken Indonesia
Frontken Indonesia’s operating loss
narrowed significantly to RM0.1 million
compared to RM0.8 million a year ago.
The overall operations continued to be
impacted by the oil and gas downturn.
Nevertheless, Frontken in Indonesia
is only one out of four companies
that possess an API certification. This
would enable the company to carry
out repairs and rectification works
or tender for projects from large oil
companies for blowout preventer
repairs when the market recovers.
Frontken Taiwan
Frontken’s
Taiwan
operations,
which are primarily focused on the
semiconductor industry, remain the
largest profit contributor to the Group.
For FYE2016, Frontken Taiwan turned
in a higher operating profit of RM23.9
million compared to RM20.6 million a
year ago. Revenue was also higher at
RM128.3 million compared to RM109.1
million last year.
The improved performance was due
to the continued strong demand
of thin-film-transistor liquid-crystal
display (“TFT-LCD”), which are used in
televisions, computer monitors, mobile
phones and projectors. During the year,
Frontken Taiwan was able to retain its
market share in some products while
securing greater market share in
others. At the same time, our Taiwan
operations continued to look at ways
to improve its production processes to
maximise efficiencies and strengthen
margins.
Frontken Philippines
For FYE2016, Frontken Philippines
achieved an operating profit of
RM3.2 million from a revenue of
RM18.4 million. This was a marginal
improvement compared with an
operating profit of RM3.1 million from
a revenue of RM15.8 million recorded
a year ago.
In the solar panels sector, Frontken
Philippines saw tangible growth
throughout its precision cleaning
business platforms. In addition,
the commencement of operations
of its customer’s new solar panel
fabrication plant (SunPower Fab 4) at
the beginning of 2016 also contributed
significantly towards revenue growth.
Apart from the photovoltaic industry,
Frontken Philippines also saw
growth in its energy business. This
was due to an increase in on-site
works for power plants’ scheduled
outages and the execution of plant
efficiency improvement programmes.
10
Frontken Corporation Berhad (651020-T)
ANNUAL REPORT
2016
Chairman’s
Message
(cont’d)
Frontken Singapore
Frontken’s Singapore operations
recorded an operating loss of RM1.1
million for FYE2016. This was higher
compared to an operating loss of
RM0.8 million for FYE2015.
While the Group’s semiconductor
related business in Singapore remained
stable, with strong support from its
customers, Frontken Singapore’s
marine and offshore as well as power
generation businesses were severely
impacted by the challenging operating
conditions.
In order to strengthen its financial
and operational position, Frontken
in Singapore will continue to focus
on improving cost effectiveness,
undertake
bigger
projects,
penetrate new markets and expand
its capabilities and know-how.
Moving forward
The global economy is expected to fare
better in 2017 compared to 2016. The
International Monetary Fund expects
the global economy to grow by 3.4% in
2017, which is slightly better than 3.1%
in 2016. Nevertheless, uncertainties
such as the future trade policy of the
United States as well as the economic
performances of Europe and China,
continue to cause concerns.