SEMICONDUCTOR player Frencken Group : E28 0% reported a net profit of S$9 million for the first quarter ended Mar 31 for FY2023, up 73 per cent from S$5.2 million in the corresponding year-ago period. 

In a business update on Tuesday (May 14), the company noted the better results were due to higher gross profit margin and revenue growth.

Revenue for the quarter rose 12.2 per cent year on year (yoy) to S$193.6 million. Revenue contribution from Frencken’s mechatronics division increased 14.4 per cent yoy to S$170.1 million as higher revenue contributions from the semiconductor, medical and analytical life sciences segments more than offset a decline in revenue from the industrial automation segment, it said.

The group’s integrated manufacturing services (IMS) also recorded similar revenue of S$22.8 million in Q1 compared to S$22.9 million in the same period last year. Lower revenue from the automotive segment – a drop of 6.6 per cent to S$16.7 million – was offset by the consumer and industrial electronics segment which reported a 29.5 per cent yoy increase in revenue to S$4.8 million.

Gross profit margin improved in Q1 2024 by 1.4 percentage points to 13.7 per cent, mainly due to better operating leverage.

Looking ahead, Frencken said it will continue to adopt a cautious stance given the uncertain global economic climate, geopolitical tensions and the prevailing conflicts in Ukraine and the Middle East.

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Based on current indicators and barring unforeseen circumstances, the group expects its revenue in H1 this year to be comparable to that in H2 2023.

Among its key business segments, the group is expecting revenue contributions from its semiconductor, medical and analytical life sciences segments to increase in H1, while the automotive segment is anticipated to register “softer revenue”.

The industrial automation segment, meanwhile, is expected to see revenue decrease, the company said.

Shares of Frencken Group ended Tuesday at S$1.36, up 3 per cent or S$0.04.