This article first appeared in The Edge Financial Daily on August 16, 2019

KUALA LUMPUR: Dialog Group Bhd posted a 22.5% increase in net profit to RM141 million in the fourth quarter ended June 30 (4QFY19) against RM115 million a year ago, on the back of an improvement in its Malaysian operations, particularly engineering, construction and plant maintenance services.

Revenue, however, declined 26% to RM449.34 million, from RM607.13 million before. Earnings per share rose to 2.3 sen, from 2.04 sen.

Dialog has declared a final dividend of 2.3 sen a share, taking total dividend payout to 3.8 sen per share or RM214.57 million for FY19. Total payout in FY2018 was 3.2 sen a share.

For the full year, Dialog’s net profit increased by 5% to RM535.84 million against RM510.37 million last year as revenue declined nearly a fourth to RM2.39 billion from RM3.11 billion before.

In a statement yesterday, the group pointed out it made a fair value gain of RM65.6 million in the previous financial year owing to the acquisition and conversion of a jointly-controlled entity into a wholly-owned subsidiary.

It attributed the better performances in FY19 to its midstream and downstream activities, particularly from engineering, construction and plant maintenance services. Moreover, Dialog’s share of profit in joint ventures and associates was also higher.

Executive chairman Tan Sri Dr Ngau Boon Keat said the group’s entry into the long-term storage agreement with BP Singapore Pte Ltd in May 2019 for Phase 3 of the Pengerang Deepwater Terminals (PDT) was a significant milestone in its ongoing development of the project.

“Presently, with Phase 1 and Phase 2, only approximately 50% of the land in PDT has been developed. With approximately another 500 acres (202ha) available for development, we are still in the early stages of developing PDT into the petroleum and petrochemical hub that we have envisioned it to be,” said Ngau.

He also said the long-term contract, as part of the groupwide master service agreement for plant maintenance in July 2019 from Petroliam Nasional Bhd, will sustain and reinforce the stability of the group’s future earnings.

Phase 1 of the PDT is being expanded by 430,000 cubic metres (m3). Meanwhile, Phase 2A, which is a petroleum and petrochemicals terminal for the Refinery and Petrochemicals Integrated Development (Rapid) commenced commercial operations in November 2018.

In addition to Dialog’s combined capacity of 647,000 m3 for terminals Langsat 1 and 2, its third Langsat Terminal has commenced partial operations for the first 100,000 m3 in August.

As far as its upstream segment is concerned, the group is developing new reserves from existing contracts and is actively looking for opportunities to increase its development and production services and assets.

Dialog closed 0.28% or a sen lower yesterday to RM3.52, valuing the company at RM19.86 billion. Some 10.72 million shares were transacted.