FRONTKEN CORPORATION BERHAD 200401012517 (651020-T) ANNUAL REPORT 2024 14 Taiwan – In FY2024, AGTC achieved a revenue of RM383.4 million, reflecting a strong 17% year-on-year growth. This performance was primarily driven by the recovery in demand and the production ramp-up of our key semiconductor customers. The semiconductor market experienced a resurgence in 2024, with investments in advanced node manufacturing and capacity expansions. AGTC played a crucial role in supporting this growth by providing highprecision cleaning services and specialty coating essential for semiconductor manufacturing equipment. Throughout the year, we made significant operational advancements across both of our Taiwan facilities, focusing on process optimisation, automation, and quality enhancement. These improvements have reinforced AGTC’s leadership in high-precision cleaning services, ensuring that we continue to meet the stringent cleanliness and performance requirements demanded by nextgeneration semiconductor technologies. To further support customer expansion plans and meet the growing demand, in March 2025 AGTC acquired a new 3,800 sqm plot of land (Plant 3), near its existing Plant 1, for approximately RM23.0 million. The management is in the planning stage for this proposed new state of the art facility. With this new facility, we will be able to better support our customer with its latest technology nodes. In 2024, AGTC also achieved an important milestone by celebrating its 25th anniversary. We also took the opportunity to acknowledge and reward quite a number of our colleagues that have been with us for the last 25 years. Their unwavering commitment and contributions have been instrumental in our success and we look forward to building a stronger future together as we continue expanding AGTC’s capabilities and reinforcing its position as a key player in the semiconductor ecosystem. Frontken Singapore (Semicon) – In FY2024, our semiconductor division in Singapore recorded low doubledigit growth, supported by a gradual recovery in customer demand and a price adjustment exercise implemented during the year. To counter rising operational costs, we successfully renegotiated contracts to realign pricing for specific parts, ensuring a more sustainable cost structure. This initiative, coupled with efficiency enhancements, contributed to an overall improvement in profitability. Despite these positive developments, we continue to face challenges, particularly in managing rising labour and material costs, as well as a tightening talent pool. The competitive labour market in Singapore remains a key concern, as recruiting and retaining skilled professionals in the semiconductor sector is increasingly difficult. To mitigate these risks, we focused on workforce optimisation by streamlining our teams, implementing automation in key processes and continuously improving operational efficiency to enhance margins. Looking ahead, preliminary feedback from our customers suggests optimism for 2025, with expectations of higher fab utilisation rates and increased order volumes. The anticipated ramp-up in customer production activity in Singapore is expected to support our business growth and in delivering a better performance. Frontken Malaysia (“FMSB”) – FMSB oversees precision cleaning operations across Kulim, Melaka, and Kuching. FY2024 was challenging, particularly for our Kulim facility, which experienced a fire incident in May 2024. Although the fire was swiftly contained and no employees were injured, operations were disrupted. However, thanks to our strategic emergency response plan, we promptly redirected orders to our backup facilities in Kuching and Singapore to ensure minimal disruption to our customers. While this resulted in some operational inconvenience, our proactive measures enabled us to retain all customer accounts and fulfill orders without major delays, demonstrating our resilience and strong customer commitment. However, the additional costs associated with this incident, including shipping, handling, and operational adjustments, placed pressure on our profit margins, leading to a decline in overall profitability. While a net insurance claim of RM2.2 million during the year helped offset some repair costs and loss of profits, it did not fully cover the broader financial impact. Thankfully, the facility was fully operational by October. We anticipate a steady recovery as our customers continue their expansion plans. The growth is expected to be driven by mass production of wide bandgap technology from our customer’s third wafer fab. Additionally, our ongoing collaborations with contract and equipment manufacturers are expected to further bolster our business. Engineering Throughout 2024, oil prices remained volatile due to various global factors, including fluctuating market conditions, shifting demand, and geopolitical tensions. Despite these challenges, our engineering division delivered a strong performance, achieving growth in both revenue and profitability. This was primarily driven by increased maintenance activities and a greater need for engineering support services, all of which contributed to our growth. Beyond sustaining growth through our traditional O&G operations, we continued to enhance our capabilities by diversifying our service offerings. By integrating specialty coating technologies and expanding our repair and maintenance services, we successfully captured new business opportunities and strengthened our competitive edge. Our resilience in this sector was underpinned by strong fundamentals, strategic long-term partnerships with customers and our ability to adapt to evolving market conditions, enabling us to drive steady business growth. CHAIRMAN’S MESSAGE (CONT’D)
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