Dolphin eyes turnaround with new business model

New strategy: Low says a turnaround is premised upon the company changing its business model to profit sharing.

PUCHONG: Loss-making Dolphin International Bhd aims to return to the black by the end of its next financial year, said group managing director Eric Low.

Low told StarBiz that the company would change the way it sells its patented machinery for palm oil mills that claims to increase oil extraction rate (OER) by 2%.

“Capital costs are one thing that our clients are worried about after the last El Nino weather phenomenon, which results in low yield of fresh fruit bunches.

“So most palm oil millers are holding back on capital expenditures (capex). This is also why our company is badly affected,” he said.

Dolphin’s net losses widened to RM2.49mil in its latest second quarter from about RM500,000 a year ago.

For the six months ended June 30, 2017, its net loss was at RM3.4mil. For financial year 2016, Dolphin reported a net loss of RM5mil.

The company recently placed out 22.2 million new shares at prices ranging from 19.5 sen to 20 sen to raise RM4.38mil.

Low said a turnaround is premised upon the company changing its business model to profit sharing based on the build-own-operate (BOO) model rather than the present build-then-transfer.

“We want to do this so that our clients would not need to fork out capex.

“Dolphin will bear the capital costs to put up the equipment at their premises while we would ink an agreement with them to get a share of future profit from the sale of crude palm oil,” Low said.

He said the company’s order book is low now but it expected to see a rise in recurring income from next year due to the change in business model.

“The idea to do BOO comes after talking to our clients. They are agreeable to this model of profit sharing,” he added.