KUALA LUMPUR (May 18): Dialog Group Bhd, an engineering company in the oil and gas, petrochemical and chemical industries, reported net profit for its third quarter ended March 31, 2016 (3QFY16) fell by 3.58% to RM78.92 million, from RM81.85 million a year ago, due to slower upstream activities and lower sales in specialist products and services.

Earnings per share for the quarter declined to 1.52 sen, from 1.65 sen, its bourse filing today showed; while revenue fell by 4.23% to RM641.40 million, from RM669.76 million a year ago.

The group declared an interim dividend of one sen per share for the quarter under review, that will go ex on June 10, and will be payable on June 28.

Dialog said its Malaysia operation remained busy this period, with engineering, construction and fabrication activities from various on-going projects such as Pengerang Deepwater Terminal Phase Two, Jetty Topside works for Samsung, MLNG Train 9, Toyo bullet tanks and Sabah Ammonia Urea project (SAMUR) piping works.

“However, these activities were partially offset by slower upstream activities and lower sales in specialist products and services,” Dialog said.

On the International front, earnings were better than 3QFY15, due to higher fabrication activities in New Zealand, and engineering and construction activities in Singapore.

“The group’s share of joint ventures profit for the current quarter was also higher, when compared to same period last year. This was mainly attributable to increased contribution from Pengerang Independent Terminal, which has fully leased out its storage capacity since 1QFY16,” Dialog said.

Cumulatively, the group’s net profit for its nine-month period ended March 31, 2016 (9MFY16) grew by 2.6% to RM217 million or 4.22 sen per share, from RM211.5 million or 4.28 sen per share in previous corresponding period.

Moving forward, Dialog said it remains confident that its business model is well structured and can withstand the current oil price volatility and currency movements.

“The drop in oil prices will lower the overall costs of processing, manufacturing and production of a wide range of petroleum and petrochemical products,” it said.

“In addition, the strong demand for storage facilities for petroleum products, reinforce the Group’s strategy to further develop and invest in the Pengerang Deepwater Terminal for the long term,” it added.

Dialog said it will continue to benefit from long term sustainable recurring income, when the additional tank terminal facilities start operations.

In the upstream sector, the group said production enhancement activities continue to be carried out in Bayan field, and the D35, J4 and D21 clusters.

“Efforts are on-going to identify and mature new oil opportunities in these mature fields. In addition, the group is seeking viable production assets, which may become available,” Dialog said.

Therefore, Dialog said it is cautiously optimistic that it will continue to deliver a healthy performance for FY16.

Dialog rose three sen or 1.99% to RM1.54 today, giving it a market capitalisation of RM8.09 billion.