KUALA LUMPUR (May 12): Frontken Corp Bhd saw its net profit for the first quarter ended March 31, 2020 (1QFY20) rise by 10.4% year-on-year (y-o-y) to RM17.01 million, from RM15.4 million, on the back of better revenue from its Taiwan semiconductor business.

In a bourse filing, the company said that its quarterly revenue rose by a marginal 1.20% y-o-y to RM84.87 million, from RM83.83 million, due to better earnings from its Taiwan-based subsidiary that caters to the semiconductor industry.

“However, the slowdown in our customers’ business in the oil and gas (O&G) sector resulted in a drop in business for the group’s oil and gas subsidiaries in Malaysia, Singapore and the Philippines. In addition, the movement control order (MCO) due to the Covid-19 pandemic resulted in a shorter business period,” it noted.

Operating expenses (opex) came in higher for 1QFY20 at RM58.11 million, from RM57.43 million a year prior.

On its prospects, Frontken expects the rest of FY20 to be challenging amid global uncertainties and downside risks stemming from Covid-19’s impact on the world economy.

Frontken noted that the drop in crude oil prices had added a layer of uncertainty, and that it needs to remain in vigilant this year while standing ready to embrace new opportunities for profitable growth in a continuously evolving market.

“Moving forward, the group will continue to drive operational and cost efficiencies to better manage the challenging operating environment,” it said.

Shares in Frontken were trading 0.44% or a sen lower at RM2.27 apiece at the noon market close, valuing it at some RM2.39 billion.