Dialog 4Q net profit up 11%, proposes 1.8 sen dividend

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KUALA LUMPUR (Aug 16): Dialog Group Bhd's net profit jumped 10.9% to RM114.85 million in the the fourth financial quarter ended June 30, 2018 (4QFY18) from RM103.55 million a year ago, on lower operating expenses, improved other operating income and increase in the group’s share of joint ventures and associates' net profit mainly contributed by Pengerang LNG (Two) Sdn Bhd.

Earnings per share was higher at 2.04 sen for 4QFY18 compared with 1.88 sen for 4QFY17. Quarterly revenue, however, fell 37.3% to RM607.13 million, from RM968.95 million in 4QFY17, on higher finance costs and tax expense.

Dialog is proposing a final dividend of 1.8 sen per share for the financial year ended June 30, 2018 (FY18) for approval at the forthcoming annual general meeting.

For the full FY18, the group's net profit grew 37.7% to RM510.37 million from RM370.64 million the previous year, despite revenue dropping 8.3% to RM3.11 billion from RM3.39 billion in FY17.

In a filing with Bursa Malaysia today, Dialog said the current year’s net profit included a RM65.6 million fair value gain, arising from the acquisition and converting a jointly controlled entity into a wholly-owned subsidiary in September last year.

It attributed the strong FY18 performance to the Malaysian operations, which saw better performances delivered by the midstream and downstream activities – in particular from its engineering, construction and plant maintenance services performed in various projects.

"In addition, the group’s financial performance for FY18 included the consolidation of the results of Langsat Terminal (One) Sdn Bhd and Langsat Terminal (Two) Sdn Bhd, as they became subsidiaries in September last year," added Dialog.

Upstream activities also contributed to the better financial performance following the higher oil prices during FY18.

On the international front, Dialog said the lower net profit contributions in FY18 was mainly due to reduced engineering, construction and plant maintenance activities. This drop was partially offset by the increased activities at the Jubail Supply Base, Saudi Arabia.

On prospects, 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," it added.

Moving forward, the group will continue to grow its core businesses with recurring income, especially in expanding its logistics businesses, which includes storage tank terminals.

"Barring any unforeseen circumstances, the group is optimistic that its performance will remain strong for FY19," Dialog said.

Dialog shares closed unchanged at RM3.35 today, bringing a market capitalisation of RM19.01 billion.