CGSI Research said the project is the right fit for Dialog given its low-risk nature.
PETALING JAYA: Dialog Group Bhd
’s joint venture (JV) with Petronas Gas Bhd (PetGas) to set up an air separation unit (ASU) facility is expected to contribute about RM10mil per annum in post-tax profits to the former from 2027 onwards, which is less than 2% of its financial year 2026 (FY26) forecast, CGS International Research (CGSI Research) says.
Regardless, it said this project is the right fit for Dialog given its low-risk nature and the project also improves the utilisation of its Pengerang Deepwater Terminal land area, albeit only incrementally.
“More significant projects are on the horizon, including new tank terminals for a biorefinery and a condensate refinery at Pengerang, which we expect will contribute to Dialog’s earnings in 2028 and make up some 18% of Dialog’s tank terminal capacity on an equity interest basis, which is why we retain our “add” rating.
“Separately, Dialog expects more plant turnaround jobs in the second half of the year, which should benefit its results half-on-half. Downside risks include the potential for the tail-end of engineering, procurement, construction and commissioning losses to drag out into FY25,” the research house noted.
Dialog and PetGas announced to Bursa Malaysia last week that they will enter into a JV to set up an ASU facility, to be located at Pengerang, Johor.
Dialog will have a 27.78% equity interest while PetGas will have a 72.22% stake in their JV company named Regas Terminal (Pengerang) Sdn Bhd. Dialog will inject RM10.2mil into the JV, with its equity contribution eventually reaching RM37mil.
“Based on 30:70 equity-to-debt funding, we estimate the total project capital expenditure at RM444mil, of which RM311mil will be funded via debt, according to Dialog.
