Frencken Group has reported earnings of $10 million for 1QFY2025 ended March 31, 2025, up 12% y-o-y.
The group’s revenue grew 11.5% y-o-y in 1QFY2025 to $215.8 million due to improved operating leverage.
Gross profit margin for the period grew 1.1 percentage points (ppts) to 14.8%.
The group has two main business divisions — the mechatronics division and IMS division.
The group’s mechatronics division’s revenue increased 14.9% y-o-y to $195.4 million in 1QFY2025 driven by higher revenue contribution from the semiconductor segment.
Accordingly, the semiconductor segment revenue grew 33.7% y-o-y to $106.2 million from steady sales growth to a key customer in Europe and a strong rebound in sales from its Asia operations.
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The group’s operations in Asia benefited from a pick-up in demand and reaped rewards from its efforts to broaden product portfolio with key customers in the front-end equipment sector.
Under the mechatronics division, the group’s medical segment increased marginally by 1.2% y-o-y from increased customer orders in Asia. Likewise, the analytical life sciences segment remained stable at $46 million in the reporting period.
Still under the mechatronics division, the industrial automation segment saw a revenue decline of 18.7% y-o-y to $7.7 million de to slower orders from a key customer in data storage solutions, due to change in customer’s product to higher capacity data storage solutions.
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The IMS division’s revenue declined 13.9% y-o-y for 1QFY2025 due to lower contributions from the automotive, and consumer and industrial electronics segments. Frencken saw a 15.7% decrease in sales to automotive customers to $14.1 million during 1QFY25, and consumer and industrial electronics segment also recorded softer revenue of $4.1 million, down 14% y-o-y.
The semiconductor segment accounted for nearly half of the group’s revenue in 1QFY2025, while analytical life sciences and medical segments contributed 21% and 15% respectively.
As at end March, Frencken has total assets worth $730.2 million, and cash and cash equivalents stood at $145.8 million.
Total liabilities for the end of March came in at $284.7 million, total borrowings amounted to $74 million, and debt to equity ratio came in at 16.7%.
Frencken says that it presently does not envisage the US tariffs to have a significant direct impact on its sales as based on historical financial information, shipments to the USA only accounted for around 9% of the group’s revenue in FY2024, of which majority of those exports were shipped from Singapore.
Moreover, the import tariffs would be borne by customers based on the incoterms, says Frencken. The group expects the operating conditions to remain challenging and volatile.
Frencken is working on several mitigating measures with regards to its tariff assessment on procurement of raw materials. These include ongoing discussions with relevant parties on supply chain adjustments and cost pass-through where applicable.
The group expects moderate revenue growth in 1HFY2025 compared to a year before. It anticipates higher revenue for its semiconductor and medical segments, stable revenue for analytical life sciences and industrial automation segments, and lower revenue for the automotive segment.
Shares in Frencken closed 2 cents higher or 1.79% up at $1.14 on May 20.
