KUALA LUMPUR (Feb 25): Frontken Corp Bhd’s (KL:FRONTKN) net profit for the fourth quarter rose 28% year-on-year (y-o-y) to a record high, on the back of strong demand in its semiconductor and oil and gas businesses.

Net profit for the three months ended Dec 31, 2024 (4QFY2024) was RM38.10 million, from RM29.71 million in the same period a year earlier, according to the semiconductor services firm in a bourse filing on Tuesday. Earnings per share stood at 2.41 sen, versus 1.89 sen in 4QFY2023.

Revenue for the quarter rose 14% y-o-y to a record high of RM149.46 million, compared with RM131.49 million in the same period last year, thanks to higher contributions from subsidiaries in Taiwan and Malaysia. 

“Volume in the semiconductor space continued to grow due to higher demand and strong orders from our customers which benefited our Taiwan subsidiary,” Frontken said.

“At the same time, the group’s local business also experienced higher orders from various contracts for its maintenance and repair services of mechanical rotating equipment,” it noted.

The group has declared a dividend of two sen per share, raising its dividend payout for FY2024 to 3.7 sen per share, 1.5 sen higher than the 2.2 sen per share it paid for FY2023.

Frontken also closed its FY2024 with a record profit of RM136.81 million, up 22% from RM111.95 million in FY2023, on the back of higher revenue and vigilant cost management. The group logs its annual best revenue of RM569.21 million in FY2024, up 14% from RM500.15 million in the previous year, thanks to improved performance from all its core businesses.

Commenting on its outlook, Frontken said that it expects global demand for semiconductors will remain strong in the long term and will continue to grow, despite challenging business conditions amid global uncertainties due to trade wars.

“The group is seeing rapid advancement and deployment of new innovative technologies and we believe that this will continue to boost the demand for the products produced by our semiconductor customers,” it said.

“Moving forward, we believe that all these developments in the electronic and technology space will be positive for our business, especially with the advent of AI (artificial intelligence) and generative AI,” it added.

Frontken also believes that its oil and gas business will continue to grow in 2025 as it expects to see more orders from the various existing contracts for manpower and materials supply, mechanical restoration and overhaul, as well as mechanical rotating equipment services.

At noon break on Tuesday, shares of Frontken were five sen or 1.33% lower at RM3.71, valuing the group at a market capitalisation of RM5.91 billion. The counter has dropped over 16% year-to-date due to the broader selldown of tech stocks amid tightening US export restrictions and the emergence of Chinese startup DeepSeek.