Dialog’s 2Q Earnings Fall, Foresees Oil Price Volatility
02.15.2021 By Ricardo Perez - NEWS

February 15, 2021 [The Malaysian Reserve] – DIALOG Group Bhd is confident it will remain profitable for the financial year ended June 30, 2021 (FY21), despite the challenging economic environment, oil price volatility and currency movements.

Growth will come from the group’s RM100 million investment to expand the Dialog Terminals Langsat facility by 85,000 cu m to its current capacity of 770,000 cu m.

The terminal expansion is expected to be completed for operations by the end of this year.

“We still have 17 acres (6.9ha) of land which can add another 200,000 cu m of storage capacity to Dialog Terminals Langsat over the longer term, thus bringing the total capacity at the Langsat facility to over 1,000,000 cu m.

“This is in line with the group’s longer-term strategy to grow its midstream terminals business to generate sustainable and recurring income,” the company noted in a Bursa filing yesterday.

Dialog’s net profit for its second quarter ended Dec 30, 2020, (2QFY21) fell 22.9% year-on-year (YoY) to RM121.81 million from RM158.01 million in the same period a year prior.

Revenue declined 42.7% to RM350.95 million in the quarter under review against RM612.31 million in 2QFY19 as the group was focused on its own internal midstream terminal assets during the quarter and the drop in upstream oil prices.

The group’s operations were busy with the development and ongoing construction of its own internal midstream terminal assets in Phase 3A of Pengerang Deepwater Terminals and the 85,000 cu m expansion of its Terminals Langsat 3.

Despite the lower revenue reported in the downstream and upstream activities, the group saw increased contributions from its recurring income business such as midstream terminals.

“The storage capacity at Dialog Terminals Langsat and Pengerang Independent Terminals Sdn Bhd, which total to 770,000 cu m and 1,780,000 cu m respectively, continued to be fully leased out,” it added.

For the six-month period, Dialog’s earnings slipped 16.8% to RM268.43 million in 2QFY20 from RM322.65 million a year prior.

It registered a lower revenue for the period at RM682.61 million, down 45.7% YoY from RM1.26 billion registered in the same period in 2019.

For the midstream sector, the group will continue to develop the Pengerang Deepwater Terminals (PDT) for oil, gas and petrochemical players who are looking to capture Asia-Pacific demand growth over the next 30 years.

“With Phase 1 and Phase 2 of PDT already in operation, the entry into the long-term storage agreement with BP Singapore Pte Ltd for Phase 3 of PDT is another significant milestone in this direction and is expected to catalyse the further development of PDT in the coming years.

“Phase 3’s land reclamation has been completed and the construction of a storage terminal, common tankage facilities (including shared infrastructure) and deepwater marine facilities (Jetty 3) are currently ongoing and expected to commence commercial operations in mid-2021,” it added.

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