Proplastics Limited is planning to invest US$2.406 million in capital projects this year as the plastics manufacturer moves to expand production capacity and prepare for expected growth in infrastructure and water projects.

The investment will be funded from the company’s internal resources and existing facilities, according to its half-year financial results for the six months ended June 30, 2026.

The company also decided not to declare an interim dividend for the current half-year, with the money instead being retained to support its expansion plans.

The decision comes after Proplastics recorded a strong first-half performance, with profit for the period rising 79% to US$623,819 from US$349,000 in the comparative period.

Revenue increased 22% to US$11.73 million from US$9.59 million, while sales volumes grew by 23%.

Management said the performance was driven by “disciplined execution and robust demand across all market segments.”

The company’s gross profit increased 19% to US$3.89 million, while overheads fell to 25% of turnover from 27% during the same period last year.

The improvement in earnings was also reflected in earnings per share, with both basic and headline earnings per share rising to 0.24 cents from 0.13 cents.

Proplastics said its investment programme is aimed at supporting production capacity as it expects infrastructure activity to increase during the second half of the year.

The company expects to benefit from government and other water reticulation projects, despite the effects of the El Niño-induced drought on the agricultural season.

“Proplastics expects to play a pivotal role in supporting government and stakeholder water reticulation projects,” management said.

For investors, the company’s ability to generate cash from its operations is also important as it prepares to spend more on expansion.

Proplastics generated US$1.18 million in net cash from operating activities during the six months.

It spent US$343,304 on investing activities, mainly on property, plant and equipment, while financing activities used US$684,648.

The company ended the period with US$545,348 in cash and cash equivalents, after an overall increase of US$151,251 during the period.

Its balance sheet also remained relatively strong, with total assets increasing to US$26.58 million from US$24.71 million at the end of December 2025.

Total equity stood at US$16.40 million, while liabilities increased to US$10.18 million from US$8.41 million.

Proplastics is also looking to grow its export business, although exports accounted for only 5% of turnover during the first half of the year.

The company said this was in line with its strategic objectives.

However, the expansion plans come against a difficult operating environment.

Proplastics identified fluctuations in the price of PVC resin as a risk to its profit margins, while geopolitical tensions, particularly conflicts in the Middle East, continue to put pressure on supply chains and input costs.

Currency shortages in the local market are another challenge facing the business.

Despite these pressures, the directors confirmed that the group remains a going concern and has adequate resources to continue operating for the foreseeable future.

The company’s traditional peak trading period is expected in the second half of the year, when management expects infrastructure development to accelerate.