FRONTKEN CORPORATION BERHAD 200401012517 (651020-T) ANNUAL REPORT 2024 15 Looking ahead to 2025, we anticipate continued demand for our engineering support services, fueled by rising global energy consumption and increased exploration and production activities. While challenges such as supply fluctuations and geopolitical uncertainties remain, we are cautiously optimistic about the year ahead. TTES Frontken Integrated Services (“TTES”) – In 2024, TTES continued to deliver a strong performance, achieving a year-on-year revenue and bottom-line growth. These results were primarily driven by an increased supply of original equipment manufactures’ parts and services, along with accelerated delivery of in-house works. Additionally, our ongoing expansion of service offerings further contributed to the overall improved performance. By leveraging the Group’s collective resources, we penetrated new products markets, enhanced productivity and strengthened our partnerships with both customers and suppliers. Apart from an upsurge in activities at our facility in Kemaman, we also observed a steady increase in orders at our facility in Pengerang. We aspire to be the most sought-after, reliable, and efficient one-stop service centre in the O&G industry, covering all aspects of maintenance, Engineering, Procurement, Construction & Commissioning and turnaround support. While we remain optimistic about sustaining our performance in 2025, we acknowledge that unforeseen fluctuations in the O&G market may pose challenges. Nonetheless, with our strategic initiatives in place, we are confident in our ability to navigate the evolving landscape and achieve sustainable performance. Frontken Singapore (Engineering) – Our engineering business in Singapore too, experienced a profit growth in 2024. This improvement was driven by securing higher margin jobs and receiving steady recurring orders from its O&G customers. Despite the positive performance, we encountered persistent challenges in workforce management, competitive pricing pressure, higher operational cost among others. Nonetheless, we successfully navigated these obstacles by optimising resource allocation, crosstraining skilled employees to enhance production efficiency and diversifying our project portfolio. The sector is expected to maintain its momentum through 2025, with a steady pipeline of projects from our existing clients. We anticipate an increase in thermal spray processes from both existing and new customers. Demand for rotating equipment and static components from petrochemical complexes in Jurong Island are expected particularly with planned maintenance shutdowns in the pipeline. Additionally, the confirmed turnaround projects this year will further bolster our revenue stream. As before, every new year is navigated with prudence. In 2025, our focus will be on expanding into new markets such as consumer product manufacturing while maintaining a strong presence in O&G and petrochemicals, enhancing partnerships with contract manufacturers and improving operational efficiency by addressing workforce challenges and investing in skills development. With these initiatives in place, we are confident in our ability to sustain our business performance in the coming year. Frontken Philippines (“FPI”) – In 2024, we achieve a revenue of RM17.4 million, an increase of 15% and an operating profit of RM3.6 million, up 71% compared to the year before. FPI’s financial performance demonstrates strong growth trajectory and ability to translate revenue gains into significantly higher profitability. The substantial improvements indicate that beyond revenue expansion, the company has successfully strengthened its financial foundation through strategic cost management, operational enhancements, and effective market positioning. In 2024, power generation industry was a key growth driver, securing major projects from both existing and new customers with core services including diaphragm repairs, generator testing and precision machining. To meet rising demand, FPI maximised the utilisation of Vertical Lathe and Cold Metal Transfer Welding Machines, optimising asset use and reinforcing our reputation as a trusted service provider. Despite a projected slowdown in O&G activities, we maintained strong engagement in the sector by securing fabrication projects from our customers in preparation for their upcoming drilling operations. Additionally, we have successfully penetrated the water utility industry through pump overhauling projects. FPI’s growth was driven by tailored engineering solutions, workforce development, and process standardisation. By continuously adapting to market needs and expanding our expertise, FPI is well-positioned for steady growth and innovation across diverse industries. Moving forward, we will continue to enhance our competency through comprehensive training initiatives and strategic partnerships with industry and technology experts. These efforts are integral to our goal of becoming recognised as experts in our field of services, ensuring that we deliver topnotch solutions and remain at the forefront of the industries we serve. CHAIRMAN’S MESSAGE (CONT’D)
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