February 15, 2017 [Dialog Group Bhd.] - The Dialog Group closed its 2nd quarter ended 31st December 2016 with another strong financial performance. Revenue for the current reporting quarter increased by 34.0 % to RM856.8 million while net profit after tax rose by 15.9% to RM93.1 million against corresponding quarter last year.
Performance Analysis
Year to date revenue and net profit after tax for the current financial year were RM1.5 billion and RM174.4 million, higher by 28.4% and 22.0%, respectively against last year.
The better financial performance achieved in the current reporting quarter was mainly attributable to higher contributions from the Group’s joint ventures in particular from Pengerang Independent Terminals which has fully leased out its storage capacity and secured better storage rates. The Group’s share of joint ventures results for the current quarter of RM25.1 million was 67.0% higher compared to RM15.0 million recorded in the corresponding quarter last year.
The Malaysia operation remained busy during the current financial quarter with engineering, construction and fabrication activities from various on-going projects such as the Pengerang Deepwater Terminal Phase 2, Jetty Topside works for Samsung in Pengerang and the construction of plasticizer plant for UPC Chemicals in Kuantan. However, the higher revenue recorded from these activities was partially offset by the lower sales in specialist products and services. This explained the slight increase in net profit after tax contribution from Malaysia operation for the current financial quarter against same period last year.
The Group’s International operation remained challenging this period. The slower upstream activities had resulted to lower sales in specialist products and services. This had resulted to a drop in net profit after tax contribution from International operation in the current financial quarter against same quarter last year.
The Group’s profit before tax for the current financial quarter of RM111.5 million was 16.5% higher against RM95.7 million recorded in the preceding quarter. This was in tandem with the higher revenue recorded in the current financial period.
Prospects
As a leading integrated technical services provider to the upstream, midstream and downstream sectors in the oil, gas and petrochemical industry, DIALOG remains confident that its business model is well structured and can withstand the current oil price volatility and currency movements. The Group’s financial track record has proven that DIALOG’s business is well risk-managed and sustainable.
The Group will also review its resources to ensure a more efficient and effective distribution, and to further improve the skills of its manpower. At the same time, the Group will continue to look for new opportunities to enhance its recurring income streams.
With the on-going operations of Pengerang Deepwater Terminal Phase 1 and current construction of Phase 2, the Group is now working towards securing new potential partners for subsequent phases, which will include the development of more petroleum and petrochemical storage terminals. Further development of the Pengerang Deepwater Terminal will provide more opportunities for the Group’s engineering, construction, fabrication and plant maintenance services.
The Group is also developing an industrial estate with a land area of approximately 170 acres that would support the development of further downstream petroleum and petrochemical industries in Pengerang, Johor.
In the upstream sector, the Group is on the lookout for viable production assets, which may become available for possible acquisition.
Barring any unforeseen circumstances, the Group is optimistic that it will continue to deliver a healthy performance for the financial year ending 30th June 2017.
