Dialog 3Q profit up 65.2% due to upstream activities

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KUALA LUMPUR: Dialog Group Bhd’s net profit surged 65.2% to RM81.8 million for the third quarter ended March from RM49.5 million in the same quarter last year, despite the perceived gloomy prospects for the oil and gas industry. 

Dialog attributed the jump in earnings to contributions from its upstream activities, mainly as a result of production sharing contract (PSC) operations for three fields D35, D21 and J4, located off Sarawak.

Its quarterly revenue grew 4.9% to RM669.8 million from RM638.3 million a year ago.

In a statement to Bursa Malaysia, Dialog (fundamental: 2.1; valuation: 0.5) declared an interim single-tier dividend of 10% per share of 10 sen each for the financial year 2015 ending June.

For the nine-month period, net profit grew 29.3% to RM211.5 million from RM163.6 million in the same period last year, but revenue fell 6.6% to RM1.78 billion from RM1.91 billion a year earlier.

Besides better results in upstream activities, Dialog recorded higher fabrication activities in various projects during the current period. But the better results were offset by lower sales in specialist products and services, it said.

On the international front, Dialog said revenue for both the current quarter and year-to-date were lower by 21% against the same period last year. This was mainly attributable to low activities in engineering, construction and plant maintenance in Singapore, fabrication in Australia and New Zealand, and lower sales of specialist products and services in India and Brunei.

On the prospects ahead, Dialog is working towards securing new potential partners for subsequent phases of the Pengerang deepwater terminal in Johor, which include the development of more petroleum, petrochemical and liquefied natural gas storage facilities.

It said development activities are also being aggressively pursued for the D35, J4 and D21 fields to rejuvenate and increase oil production under the PSC.

Dialog ended down one sen or 0.6% to RM1.60, giving it a market capitalisation of RM8.09 billion.

 

This article first appeared in The Edge Financial Daily, on May 13, 2015.