KUALA LUMPUR: Dialog Group Bhd
's 1Q19 results were positive with core earnings jumping 28% despite 11% lower revenue due to reduced EPCC works, offset by better tanker contributions.
Kenanga research said the first quarter core net profit of RM114.5mil came within its and consensus expectations.
It reiterated its outperform call on the counter with an unchanged target price of RM3.80.
The research house said it has made no changes to its FY19-20E forecasts, implying earnings growth of 7-14% driven by Pengerang dedicated Terminals Phase 2 expected to commence in 1H CY2019, Pengerang Phase 1E expected to commence in 2H CY2019, and full-year earnings from Langsat Terminals’ consolidated accounts and Pengerang LNG2.
"As for the longer-term, DIALOG is currently in the midst of securing partners for Pengerang Phase 3, with the land reclamation of 300 acres believed to be currently in progress.
"With an initial capex of RM2.5b and expected commencement in 5-6 years’ time, we believe Pengerang Phase 3 will eventually add an additional c.5-6m cubic meters of storage capacity," it said.
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