KUALA LUMPUR (Aug 5): SLP Resources Bhd's net profit for the second quarter ended June 30, 2016 (2QFY16) slipped by 5.4% to RM6.07 million or 2.45 sen per share from RM6.41 million or 2.59 sen per share in the same corresponding quarter a year ago, largely due to lower domestic sales.

A filing with Bursa Malaysia said the Group recorded lower domestic sales of RM17 million as compared to RM21.7 million 2QFY15 due to slower domestic demand as well as stricter credit control imposed by the Group on domestic customers.

"The lower average unit selling price of sales denominated in USD due to weaker USD particularly in the month of April has also attributed to lower profit before tax in the current year quarter," it added.

In a separate filing with the bourse, SLP Resources declared a first single-tier interim dividend of 1.5 sen per share, amounting to approximately RM3.7 million. The ex and payment dates fall on Sept 6 and Oct 5 respectively.

For 2QFY16, the Group also recorded slightly lower revenue of RM42.2 million from RM42.5 million in 2QFY15.

For the first half of the financial year ended Dec 31, 2016 (1HFY16), its net profit grew by 2.65% to RM11.2 million from RM10.9 million in 1HFY15, while its revenue increased by 3.44% to RM86.8 million from RM83.9 million.

According to its bourse filing, 61.4% of the revenue contribution for 1HFY16 was from overseas markets compared to 52.9% in the same period a year earlier.

"This is in line with the Group's business strategies and targets to continuously grow its sales of thin-gauged flexible plastic packaging products or films in overseas markets," it added.

Since last year, the Group had initiated a plan on new product development for healthcare packaging.

"In anticipation of new orders for this new healthcare plastic packaging as well as more orders for the thin-gauged plastic packaging, the Group has allocated approximately RM12 million for the acquisition of new machinery and construction of a new factory building adjacent to its existing plants in Kulim Industrial Estate in Kedah.

"This capacity expansion plan is well on track for completion in September 2016," it said.

The Group expects to achieve higher sales volume and deliver satisfactory financial results for the financial year ending Dec 31, 2016 despite the expectation of a challenging economic environment.

As of closing, SLP Resources was untraded at RM3 with a market capitalisation of RM742 million. At the current share price, it is trading at a trailing P/E of 26.6 times. The counter has surged by 57.89% year to date and 103.4% compared to a year ago.