Dialog posts flattish 2Q net profit of RM127mil

KUALA LUMPUR: Dialog Group Bhd aims to remain focused and steadfast in the pursuit of its key long-term strategies.

In a filing with Bursa Malaysia yesterday, the integrated technical service provider said it remains confident that its business model is well structured to manage and sustain the group through periods of economic uncertainty, oil price volatility and currency movements.

For its second quarter ended Dec 31, 2022, Dialog reported a net profit of RM127.15mil against RM127.88mil in the previous corresponding period, mainly due to higher project and operation costs.

Revenue in the second quarter rose to RM797mil from RM544.49mil a year earlier.

Basic earnings per share stood at 2.25 sen versus 2.27 sen a year earlier.

For the six-months period ended Dec 31, 2022, Dialog’s net profit dipped to RM252.94mil from RM256.69mil a year earlier, while revenue improved to RM1.51bil from RM1.05bil previously.

Dialog said its Malaysian downstream team remained busy with various engineering, construction, fabrication, and plant maintenance projects.

“The unprecedented challenges brought on by the Covid-19 pandemic, conflict in Ukraine, inflationary pressures and manpower constraints continue to impact our on-going projects.

“These unexpected circumstances have caused severe supply chain disruption, higher material price and labour cost.”

Despite these challenges, Dialog said its main priority is still to complete and deliver the committed projects, which have inevitably resulted in cost overruns and some project losses.

Dialog said its upstream business reported a higher revenue in the current financial quarter and year-to-date due to higher oil prices.

“The profit margin from upstream business was however lower due to higher operation cost.”

On the international front, Dialog reported higher revenue and profit contributions for the current financial quarter and year-to-date.

This was due to higher sales of specialist products and services in various countries, together with increased engineering, construction and maintenance activities in Singapore, and fabrication activities in New Zealand.

Going forward, Dialog said its focus will continue to be on the midstream business, namely the ongoing development of Pengerang Deepwater Terminals (PDT) into the largest petroleum and petrochemical hub for Asia Pacific region.

“Phase 3 of PDT has been designated for the development of more dedicated petroleum and petrochemical storage terminals for medium to long-term customers, potentially comprising energy traders, multinational energy companies, refineries, and petrochemical plants.

“This will support the further development of various downstream operations including those of the refinery and petrochemical plants within the Pengerang Integrated Petroleum Complex.”

In the downstream business, Dialog said it will continue to leverage on its strengths and established track record in integrated technical services comprising engineering, procurement, construction and commissioning, plant maintenance and catalyst handling services and specialist products and services.

“As the economic environment is expected to remain extremely challenging in the short to medium-term, we will continue to build and strengthen our competencies by investing and multi-skilling our workforce to ensure we remain efficient and competitive.

“Barring any unforeseen circumstances, the group remains optimistic of its positive performance in the financial year ending June 30, 2023,” it said.

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