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New Straits Times
16-05-2025
- Business
- 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.
New Straits Times
15-05-2025
- Business
- New Straits Times
Dialog Group's Q3 net profit falls to RM134.96mil
KUALA LUMPUR: Dialog Group Bhd's net profit for the third quarter ended March 31, 2025 (3Q 2025), decreased to RM134.96 million as compared to RM156.16 million recorded in the same quarter last year. Revenue fell to RM578.80 million from RM702.19 million previously, the group said in a filing with Bursa Malaysia today. "The performance in the current quarter was driven by contributions from both Malaysia and International operations, as well as a share of profits from the group's joint ventures and associates," it said. Within Malaysia, Dialog said the performance was driven primarily by midstream and upstream operations, where the midstream operation reported better results with increased earnings from higher tank storage occupancy and increased tariff rates at independent terminals, while the upstream operation continued to deliver strong production volume from its assets. "The revenue and profits contribution for the current financial quarter were, however, reduced slightly, compared to the same period last year, due to lower realised oil prices," it said. On the international front, Dialog said the revenue and profits achieved in the current financial quarter were lower compared to the corresponding quarter in the previous financial year due to reduced business activities. Meanwhile, in a separate filing, Dialog has announced a payment of an interim cash dividend of 1.30 sen per ordinary share held in the company in respect of the financial year ending June 30, 2025, to be paid on June 26, 2025.
