Frencken Group's FY2024: A Semiconductor-Driven Success Story

Frencken Group Limited (SGX:E28) reported its full-year 2024 earnings results on March 2, 2025, with revenues beating expectations. The company's revenue grew by 6.9% year-on-year to SGD 794.3 million, while net profit attributable to equity holders increased by 14.3% to SGD 37.1 million. Earnings per share (EPS) stood at $0.0869. The company's gross profit margin expanded to 14.5%, and the net margin increased to 4.7%.

The semiconductor segment was the star performer, with revenue jumping 29.4% year-on-year to SGD 365.5 million. This growth was driven by increased orders from a key customer in Europe and continued recovery in sales from Asia operations. The medical and analytical life sciences segments also showed modest growth, while the industrial automation and automotive divisions remained weak.

Frencken Group's Mechatronics Division reported a 7.9% YoY revenue increase, contributing to the overall revenue growth of 6.2% for the period. The division's improved performance helped the company achieve an overall revenue increase of 6.9% YoY in 2024.

The company declared a 2.61Scts DPS (vs 2.28 in FY23), translating to a payout ratio of 30%, similar to the previous year.

Frencken Group's gross profit margin expansion positively impacted its overall profitability. The company's gross profit margin improved to 14.5% from 13.2% in 2023, mainly due to better operating leverage as revenue increased. This improvement in gross profit margin led to a rise in net margin to 4.7% from 4.4% in the previous year.

The company expects sequential revenue improvement in its European semiconductor business in 1H25, despite the industry downturn. Asian semiconductor revenue is also projected to rise due to increased demand and wallet share expansion with key customers in the front-end equipment space. The group's positive view on the semiconductor divisions aligns with the broader industry.

Frencken Group's FY2024 results demonstrate the company's resilience and ability to navigate market headwinds. The semiconductor segment's strong performance drove overall revenue and profitability, while other segments maintained relatively stable revenue. The company's focus on expanding production capabilities in Singapore and the USA reflects its confidence in long-term business prospects and the growth of the semiconductor industry.