Kenanga Research increased its FY26 earnings forecast for Dialog by 18%.
PETALING JAYA: Dialog Group Bhd
’s tank terminal segment is expected to continue to support growth as demand for storage typically rises during periods of weaker crude oil prices.
Kenanga Research said the oil and gas players’s core results for the financial year ended June 30, 2025 (FY25) were within both its (102%) and consensus’ (99%) expectations.
“Earnings recovered quarter-on-quarter due to the improvement in engineering, procurement, construction and commissioning (EPCC) margins and healthy tank terminal storage utilisation.
“We believe the margin recovery in EPCC appears to be sustainable evidenced by the performance over two consecutive quarters, while its tank terminal business is expected to anchor earnings in the near term,” the research house said in a report yesterday.
Kenanga Research said the EPCC division has shown early signs of stabilisation, achieving breakeven in the latest quarter – easing concerns about further cost overruns.
Kenanga Research increased its FY26 earnings forecast for Dialog by 18% to account for the recovery of EPCC earnings, with losses projected to narrow to RM20mil from RM130mil previously.
It maintained its “outperform” call with a higher target price of RM2.24 a share (from RM1.96).
Meanwhile, CIMB Securities also revised Dialog’s FY25 and FY26 core earnings per share estimates upward by 1.5% following housekeeping adjustments.
It forecasts 31.1% EPS growth in FY26, driven primarily by the expected recovery in downstream earnings in the absence of cost overruns in the EPCC segment following the completion of legacy contracts.
“Additionally, FY26 downstream earnings are expected to benefit from Petroliam Nasional Bhd’s scheduled onshore plant turnaround activities commencing in 2H25,” the research house said.
