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

This article first appeared in The Edge Financial Daily, on August 17, 2018.
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KUALA LUMPUR: Dialog Group Bhd’s net profit jumped 10.9% to RM114.85 million in 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 an increase in the group’s share of joint ventures and associates’ net profit that was mainly contributed by Pengerang LNG (Two) Sdn Bhd.

Earnings per share were 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 expenses.

Dialog is proposing a final dividend of 1.8 sen per share for 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 in the previous financial year, despite revenue dropping 8.3% to RM3.11 billion from RM3.39 billion in FY17.

In a filing with Bursa Malaysia yesterday, Dialog said the current year’s net profit included a RM65.6 million fair value gain arising from the acquisition of the remaining 45% equity interest in Centralised Terminals Sdn Bhd and subsequently turning it 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.

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