KUALA LUMPUR (Nov 24): SKP Resources Bhd (KL:SKPRES) on Monday (Nov 24) reported a 20% fall in its net profit for its second financial quarter due to start-up costs associated with onboarding new customers.

The net profit for the quarter ended Sept 30, 2025 (2QFY2026), dropped to RM27.48 million from RM34.35 million a year earlier, according to the group's Bursa Malaysia filing. Earnings per share dipped to 1.76 sen from 2.20 sen.

Revenue declined 15.4% to RM537.39 million from RM635.29 million in 2QFY2025.

No interim dividend was declared for the quarter.

Gross profit margin went up to 13.1% from 12.0% a year earlier, although profit before tax margin narrowed to 6.7% from 7.1% due to higher initial expenditures tied to new customer contracts.

Operating expenses remained stable at RM36.74 million compared with RM36.19 million a year earlier, while finance costs edged up to RM994,000 from RM954,000.

For the first half ended Sept 30, 2025, SKP Resources reported a 12.7% year-on-year decline in net profit to RM54.71 million from RM62.69 million, while revenue dropped 7.9% to RM1.05 billion from RM1.14 billion.

SKP Resources, an electronics manufacturing services provider primarily engaged in plastic product manufacturing and mould fabrication, highlighted ongoing customer diversification efforts to mitigate credit concentration risks.

"The group is mindful of significant credit concentration risk that may arise from a major customer and continuously seeks to diversify its customer base," it said, without specifically naming the major customer.

The group said it remains positive on its prospects, citing plans to enhance its capabilities in printed circuit board assembly, injection moulding and engineering services.

Shares of SKP Resources slipped 2.5 sen or 3.7% to close at 65 sen on Monday, giving the group a market capitalisation of RM1.02 billion. Year-to-date, the counter has lost over 45%.