The rise is attributed to a higher share of profits from joint ventures and associates, terminal business and increased plant services activities
By AFIQ AZIZ / Pic By dialogasia.com
DIALOG Group Bhd earnings jumped 15.5% year-on-year to RM158 million in the second quarter (2Q) ended Dec 31, 2019, on higher business contributions from its businesses.
In an exchange filing yesterday, the petrochemical service provider’s revenue rose slightly by 0.4% to RM612.3 million from RM609.613 million in the corresponding quarter.
The company attributed its performance to Malaysian operations, which saw a higher share of profits from joint ventures and associates, terminal business and increased plant services activities.
It said the Dialog Terminals Langsat 3, which commenced partial operations of its 120,000 cu m storage facility in August 2019, had also contributed positively to the Malaysian operations.
“The international operation also recorded a higher net profit after tax in 2Q, contributed by higher engineering, construction, fabrication and plant services activities and increased specialist products and services sales,” the group said.
The company’s pre-tax profit for Malaysia stood at RM336.6 million compared to Asia at RM13.89 million, New Zealand RM11.45 million and East Countries (RM20.02 million). Basic earnings per share for the quarter was 2.8 sen.
Despite economic uncertainty, oil price volatility and currency movement, the group remains positive on its outlook for future quarters.
In the midstream sector, Dialog said the ongoing development of Pengerang Deepwater Terminals (PDT) will continue to take centre stage for oil, gas and petrochemical players who are looking to capture Asia-Pacific demand growth over the next 30 years.
“PDT offers a compelling value proposition for the establishment of strategic hub operations given its ideal location and one-stop integrated hub offering,” the company said.
The company is also looking forward to entering PDT Phase 3 with BP Singapore Pte Ltd as the first two phases have already taken off.
Phase 3 land reclamation has completed and the construction of a storage terminal, common tankage facilities (including shared infrastructure) and deepwater marine facilities (Jetty 3) have also begun and completion is expected in mid-2021.
“Phase 3 of PDT is another significant milestone in this direction and is expected to catalyse the further development of PDT in the coming years,” it said.
Dialog also said there are about 202ha of available land for future development.
In addition to Dialog Terminals Langsat 1 and 2 with a total capacity of 647,000 m3, Dialog said its Terminals Langsat 3 has also commenced full operations for its 120,000 cu m storage facility in January 2020.
“We are planning to expand Dialog Terminals Langsat 3 into a 300,000 cu m storage facility, in line with our strategy to grow sustainable and recurring income,” it added.
In the downstream sector, Dialog is looking to continue on leveraging its capability and track record in integrated technical services comprising engineering; procurement; construction and commissioning; plant maintenance and catalyst handling services; and specialist products and services.
“With the completion of PDT Phase 2 and the refinery projects at Refinery and Petrochemical Integrated Development, we are now actively involved in the plant maintenance services for these projects, in addition to other existing projects,” the company said.
In July 2019, Dialog secured a Groupwide Master Service Agreement from Petroliam Nasional Bhd (Petronas).
The agreement covers integrated plant turnaround works and daily maintenance work on mechanical static for Petronas’ plants groupwide and is valid for a period of five years with an option to extend by the national oil company.
For its upstream business, Dialog will continue to develop new reserves from the existing contracts and look for opportunities to increase its development and production services and assets.
“Barring any unforeseen circumstances, the group is confident that its performance will remain on a positive trajectory for the financial year ending June 30, 2020,” the company said.
Dialog’s share price settled at RM3.39, down one sen yesterday, giving it a market capitalisation of RM19.13 billion.