Higher JV contributions raise Dialog 2Q earnings - The Edge Financial Daily
|Higher JV contributions raise Dialog 2Q earnings |
15 Feb, 2017
Source: The Edge Financial Daily
Firm remains optimistic going forward due to wellstructured business model
BY ADELA MEGAN WILLY
KUALA LUMPUR: Dialog Group Bhd's net profit in the second financial quarter ended Dec 31,2016 (2QFY17) rose 17% to RM91.36 million from RM78.01 million a year ago, on higher contributions from its joint ventures (JVs).
In a filing with Bursa Malaysia yesterday, Dialog said these JVs include the Pengerang Independent Terminals, which has fully leased out its storage capacity and secured better storage rates.
"The group's share of JV results for the current quarter of RM25.1 million was 67% higher compared with RM15 million recorded in the corresponding quarter last year," it said.
Revenue rose 34% to RM856.78 million from RM639.63 million.
"The Malaysian operations remained busy during the current financial quarter with engineering, construction and fabrication activities from various ongoing projects such as the Pengerang Deepwater Terminal Phase 2, Jetty Topside works for Samsung in Pengerang and construction of a plasticiser plant for UPC Chemicals in Kuantan," it said.
However, the higher revenue recorded from these was partially offset by lower sales in specialist products and services. This resulted in a slight increase in net profit contribution from Malaysian operations in 2QFY17.
Outside Malaysia, Dialog's operations remained challenging in 2QFY17, with slower upstream activities resulting in lower sales of specialist products and services.
"This had resulted in a drop in net profit contribution from international operations in the current financial quarter," it said.
For the first half of FY17, Dialog's net profit rose 25% to RM172.69 million from RM138.08 million a year earlier, as revenue climbed 28.4% from RM1.18 billion to RM1.51 billion.
Going forward, Dialog — an integrate technical services provider to the upstream, midstream and downstream sectors in the gas and petrochemical industries—remains optimistic as its business model is wellstructured 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, and will also review its resources to ensure a more efficient and effective distribution, and to further improve the skills of its manpower," it said.
It will also continue to look for new opportunities to enhance its recurring income streams.
It added that with the ongoing operations of the Pengerang Deepwater Terminal Phase 1 and the construction of Phase 2, the group is now working towards securing new potential partners for subsequent phases, which will include the development of more petroleum and petrochemical storage terminals.
"Barring any unforeseen circumstances, the group is optimistic that it will continue to deliver a healthy performance for the financial year ending June 30, 2017," Dialog said.
Dialog's share price closed 0.7% higher at RM 1.55 yesterday, valuing the group at RM8.39 billion.