This article first appeared in The Edge Financial Daily on November 12, 2019

KUALA LUMPUR: Dialog Group Bhd’s net profit jumped 43.6% to RM164.64 million or 2.92 sen per share for the first financial quarter ended Sept 30, 2019 (1QFY20), from RM114.64 million or 2.03 sen per share for the year-ago quarter.

This was despite a 6.5% contraction in quarterly revenue to RM645.76 million from RM690.89 million for 1QFY19, the group’s filing with Bursa Malaysia yesterday showed.

Dialog said its better quarterly earnings came from stronger performance of all activities within its Malaysian operations, besides a higher share of profit from joint ventures and associates. Its international operations also recorded higher profitability, contributed by higher engineering and construction activities and increased specialist products and services sales.

Additionally, Dialog said it booked a RM28.5 million non-cash fair value gain, arising from a business combination of a jointly-controlled entity to a subsidiary.

Dialog remains confident that its business model is well-structured to manage and sustain itself through economic uncertainty, oil price volatility and currency movements. The group said its performance should remain positive for the current financial year ending June 30, 2020 (FY20).

For its midstream sector, Dialog said its Phase 3 land reclamation at Pengerang Deepwater Terminals (PDT) remains on track and is scheduled for completion at end-2019. The construction of a storage terminal, common tankage facilities and deepwater marine facilities has also begun, with the completion expected in mid-2021.

“In addition to Dialog Terminals Langsat 1 and 2 with a total capacity of 647,000 cubic metres (cu m), Dialog Terminals Langsat 3 commenced partial operations for its 120,000 cu m storage facility in August 2019. We are planning to expand Dialog Terminals Langsat 3 into a 300,000 cu m storage facility, in line with our strategy to grow sustainable and recurring income,” it said.

For downstream, Dialog said it will still leverage its strengths in integrated technical services comprising engineering, procurement, construction and commissioning, plant maintenance and catalyst handling services, and specialist products and services.

“With the completion of PDT Phase 2 and refinery projects at Rapid (Refinery and Petrochemical Integrated Development), we are now actively involved in plant maintenance services for these projects, apart from other existing projects.

“In the upstream sector, the group continues to develop new reserves from the existing contracts,” it added.