KUALA LUMPUR (May 10): Surface engineering service provider Frontken Corp Bhd's net profit for the first quarter ended March 31, 2022 (1QFY22) jumped 15.71% to RM26.51 million from RM22.91 million in the same period a year earlier.

This was a result of improved revenue and better profit margin resulting from the continual efforts to improve efficiencies across the group.

Earnings per share for the quarter went up year-on-year (y-o-y) to 1.69 sen from 1.46 sen previously, its bourse filing showed.

"The group achieved another remarkable first quarter compared to the preceding year's corresponding period, mainly attributable to the significant growth in our semiconductor business," Frontken said in its filings.

Revenue for the quarter grew 15.1% to RM119.15 million from RM103.52 million mainly due to bigger contributions by its subsidiaries in Taiwan and Malaysia.

Frontken noted volume in the semiconductor space picked up significantly due to higher demand and strong orders from one of its customers' advanced nodes chips, which benefitted its Taiwan subsidiary.

On the domestic front, Frontken said the improvement in the local business was largely due to new orders for provision of manpower supply and mechanical rotating equipment services from various contracts that the group had with the Petroliam Nasional Bhd group of companies.

However, Frontken said its subsidiary in Singapore recorded a slightly lower revenue compared with in the preceding year's corresponding quarter, caused mainly by a shortage in labour attributable to Covid-19 safety measures implemented by the government of Singapore.

This was in addition to delay in Frontken's oil and gas customer orders attributable to the disruption in oil and gas supply and related economic activities due to the Russia-Ukraine War.

On prospects, Frontken believes that the projected substantial increase in production by the semiconductor companies and persistent high demand of chips will be positive for its business in years to come.

This is after it cited World Semiconductor Trade Statistics, which predicted that the global semiconductor market to grow by 8.8% in 2022 to US$601 billion, driven by double-digit growth of the sensors and logic category.

As for the oil and gas industry, Frontken is cautiously optimistic that its business will be stronger compared with last year due to increased demand partially caused by disruptions in the global oil and gas supply.

"As always, the group will continue to drive operational and cost efficiencies to better manage the challenging operating environment," it added.

At the time of writing, Frontken's shares gained three sen or 1.19% to RM2.55, giving the group a market capitalisation of RM4.03 billion.