KUALA LUMPUR (Nov 25): SKP Resources Bhd, one of the contract manufacturers for British consumer goods company Dyson Ltd in Malaysia, said on Monday it is mindful that it is heavily reliant on a major customer and is seeking to diversify its customer base, while it reported a 26.89% year-on-year jump in its second quarter net profit on higher revenue.
"The group is mindful of significant credit concentration risk that may arise from a major customer and continuously seek to diversify its customer base," SKP Resources said in in its July-September results filing on Monday.
The group also said it is operating under a challenging business landscape with persistent inflationary pressure that is pushing up production costs, and promised to remain vigilant with future orders to ensure a lean and highly efficient operating structure, adding its board is "positive that the group will sustain its resilience by maintaining a robust financial position".
Bloomberg reported last Thursday that Dyson was going to be dialling back its hairdryer-related operations in Malaysia in a bid to streamline its business in the region. Impacted employees would be redeployed to other parts of its facility that is located in Johor, the news agency wrote, citing sources. Dyson was also in "very early stage discussions regarding a broader review of its presence in Malaysia", it wrote.
Should a full exit happen, it would take some time and a ramp down would also hinge on Dyson’s ability to move manufacturing elsewhere, the report noted. As of last week, no final decisions had been made, while the Malaysian government was in talks with Dyson about any further moves, the report added.
Besides Dyson, SKP Resources also counts Panasonic, Sharp, Pioneer, Sony and Fujitsu among its customers, according to its website.
SKP Resources made a net profit of RM34.35 million for its second quarter ended Sept 30, 2024 (3QFY2024), from RM27.07 million in 3QFY2023, as revenue climbed 22.2% to RM635.29 million from RM519.91 million, amid a recovery in customer demand. No dividend was declared. Its profit after tax margin rose to 5.4% from 5.2%, which the group said reflects effective cost management.
For its first six months of FY2024, SKP Resources recorded a 28.8% jump in net profit to RM62.69 million from RM48.66 million in the corresponding six months of FY2023, as revenue grew 19.9% to RM1.14 billion from RM951.52 million.
SKP Resources' share price closed unchanged at RM1.05 on Monday, giving the group a market capitalisation of RM1.64 billion. Year to date, the stock is up 26 sen or 32.91%.
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