Dialog to continue its focus on midstream business
The company said ongoing projects in the upstream segment will count towards its diversification strategy.
PETALING JAYA: Dialog Group Bhd will continue to focus on its longer term strategy of growing its sustainable and recurring income.
Dialog Group has the second largest independent terminal owner-cum-operator in South-East Asia with a current operating capacity of 5.1 million metres cube.
Dialog's midstream business will continue to be its core focus and it will continue to invest in phased capacity expansions for dedicated long-term customers across its mid-stream terminals business portfolio.
The group will also focus on the development of Pengerang Deepwater Terminals to transform it into one of the largest petroleum and petrochemical hubs for the wider Asia Pacific region.
For new projects in the downstream segment, the group said it will conduct thorough risk assessments for new projects and strategically pursue opportunities that align with its risk management framework and strategic goals.
This is due to the current geopolitical and market uncertainties.
'We will take a cautious and selective approach to bidding for engineering, procurement, construction and commissioning contracts to prioritise in-house projects,' it said.
In its upstream business, Dialog said it will continue to grow its presence through the development and rejuvenation of oil and gas fields. Ongoing projects here in the upstream segment will count towards its diversification strategy, it said.
In its third quarter ended Mar 31, Dialog saw a decline in both its revenue and net profits.
Net profits for the third quarter declined year-on-year (y-o-y) by 13.6% to RM134.97mil while revenues dropped 17.6% y-o-y to RM578.81mil.
'The current net profit position is a recovery from the net loss of RM125.6mil in the preceding quarter.
'The performance in the current quarter was driven by contributions from both the company's Malaysia and international operations, as well as share of profits from the group's joint ventures and associates,' it said.
Within Malaysia, the group said its performance was driven primarily by midstream and upstream operations.
'The midstream operation reported better performance with increased earnings from higher tank storage occupancy and increased tariff rates at our independent terminals. The upstream operation continued to deliver strong production volume from its assets,' it said.
'The revenue and profits contribution for the current financial quarter was, however, reduced slightly when compared to the same period last year due to lower realised oil prices,' it added.
On the international front, Dialog said revenue and profits achieved in the current financial quarter was lower y-o-y due to reduced business activities.
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New Straits Times
16 hours ago
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Dialog seen ripe for re-rating on potential tank terminal contracts
KUALA LUMPUR: Dialog Group Bhd's stock could see an upward re-rating once long-term tank terminal contracts for its Pengerang Deepwater Terminal (PDT) Phase 3 are secured. Hong Leong Investment Bank Bhd (HLIB Research) said near term potentials include storage leases for ChemOne's aromatics plant and Petronas' joint venture biorefinery. The firm maintained its forecasts and reiterated a 'Buy' call on Dialog, keeping the target price unchanged at RM2.59. "We believe the eventual award of long-term tank terminal contracts for PDT Phase 3 will help re-rate the stock, which is currently trading at a reasonable valuation of 16 times forecast earnings for financial year 2026, compared to its five-year mean of 23 times. "We like Dialog for its recurring income business model and its unique position in riding the future expansion of Pengerang via development of tank terminals," it said in a research note. HLIB Research also highlighted that Dialog's downstream engineering, procurement, construction and commissioning business has swung back to minor profitability in the third quarter of financial year 2025 (3Q25). It said the group had assured that there would be no further cost provisions in anticipation of the official handover of Melamine plant in Kedah and gas compressor plant in Kluang to Petronas by the second half of 2025. On the midstream front, HLIB Research said storage rates edged up slightly to S$6.4 (RM20.98) to S$6.6 (RM21.63) per cubic metre in 4Q25, compared to S$6 (RM19.67) to S$6.5 (RM21.31) over the past year. It noted that this uptick was driven by stronger storage demand from oil traders, spurred by increased crude supply from OPEC+ and softening oil prices amid escalating trade tensions and heightened demand uncertainty. "The temporary shortfall from upstream in 4Q25 should be mitigated by better midstream contribution," it said.
New Straits Times
16-05-2025
- New Straits Times
Dialog needs major tank terminal wins to boost earnings, share price, say analysts
KUALA LUMPUR: Dialog Group Bhd would need to secure new, large-scale tank terminal contracts in order to drive a re-rating of its share price, as this would strengthen its recurring income base. According to Maybank Investment Bank Bhd (Maybank IB), recurring income currently accounts for 55 per cent of Dialog's core net profit. "Dialog could benefit from ChemOne Group's development of Pengerang Energy Complex and Petroliam Nasional Bhd's RM6 billion development of a 650,000 biorefinery with Eni and Euglena with the need for tank terminals for LT storage of refined/crude products," it said in a note. Dialog reported a decline in net profit for the third quarter of 2025 (3Q25), posting RM134.96 million compared to RM156.16 million in the corresponding quarter last year. Revenue also dropped to RM578.80 million, with the group attributing its performance during the quarter to contributions from both its Malaysian and international operations, along with profit shares from joint ventures and associates. Maybank IB said Dialog remains profitable in its downstream segment through both its engineering, procurement, construction and commissioning (EPCC) and plant turnaround divisions. It added that the group's core net margin rose to a multi-year high of 23.4 per cent in 3Q25, which is an improvement of 0.3 percentage points, likely driven by the absence of losses in the EPCC segment during the quarter. "The results came in within our expectations. As such, we make no changes to our financial year 2025 to 2027 (FY25-FY27) earnings estimates and maintain our target price of RM2.34. "We continue to like Dialog for its operational/financial stability from its midstream tank terminal assets," it added. Hong Leong Investment Bank Bhd (HLIB) noted that Dialog's earnings came in below both its and market expectations, mainly due to higher tax expenses and a slowdown in regional activities as several major projects approached completion in 3Q25. However, the firm remains optimistic about the outlook for Dialog's downstream segment, expecting continued growth supported by an expanding pipeline of plant maintenance projects and potential reversals of earlier substantial EPCC provisions. "The group's midstream operations stayed stellar with near full utilisation (>90 per cent) with storage rates of SG$6-6.5 per cubic meter. "Given the decreasing US dollar/ringgit, its share of joint ventures/associates could potentially see better contributions in the coming quarters due to forex translation gains (Pengerang JV terminals books denominated in US dollars)," it adds. HLIB has revised down its earnings forecasts for Dialog by 10 per cent for FY25, 7 per cent for FY26, and 6 per cent for FY27, reflecting lower expected revenue from the downstream segment and a higher assumed tax rate.
The Star
16-05-2025
- The Star
Dialog to continue its focus on midstream business
The company said ongoing projects in the upstream segment will count towards its diversification strategy. PETALING JAYA: Dialog Group Bhd will continue to focus on its longer term strategy of growing its sustainable and recurring income. Dialog Group has the second largest independent terminal owner-cum-operator in South-East Asia with a current operating capacity of 5.1 million metres cube. Dialog's midstream business will continue to be its core focus and it will continue to invest in phased capacity expansions for dedicated long-term customers across its mid-stream terminals business portfolio. The group will also focus on the development of Pengerang Deepwater Terminals to transform it into one of the largest petroleum and petrochemical hubs for the wider Asia Pacific region. For new projects in the downstream segment, the group said it will conduct thorough risk assessments for new projects and strategically pursue opportunities that align with its risk management framework and strategic goals. This is due to the current geopolitical and market uncertainties. 'We will take a cautious and selective approach to bidding for engineering, procurement, construction and commissioning contracts to prioritise in-house projects,' it said. In its upstream business, Dialog said it will continue to grow its presence through the development and rejuvenation of oil and gas fields. Ongoing projects here in the upstream segment will count towards its diversification strategy, it said. In its third quarter ended Mar 31, Dialog saw a decline in both its revenue and net profits. Net profits for the third quarter declined year-on-year (y-o-y) by 13.6% to RM134.97mil while revenues dropped 17.6% y-o-y to RM578.81mil. 'The current net profit position is a recovery from the net loss of RM125.6mil in the preceding quarter. 'The performance in the current quarter was driven by contributions from both the company's Malaysia and international operations, as well as share of profits from the group's joint ventures and associates,' it said. Within Malaysia, the group said its performance was driven primarily by midstream and upstream operations. 'The midstream operation reported better performance with increased earnings from higher tank storage occupancy and increased tariff rates at our independent terminals. The upstream operation continued to deliver strong production volume from its assets,' it said. 'The revenue and profits contribution for the current financial quarter was, however, reduced slightly when compared to the same period last year due to lower realised oil prices,' it added. On the international front, Dialog said revenue and profits achieved in the current financial quarter was lower y-o-y due to reduced business activities.
