Dialog Group’s quarter three financial year 2023 core net profit of RM132 million took nine months financial year 2023 core earnings to RM391 million; 63% of Maybank Investment Bank Bhd (MIBB)’s financial year estimates.
MIBB in a recent report deems this to be below estimate, for the expectation was for a sequential double-digit earnings growth.
In their view, the sub-par quarter-on-quarter performance was still largely due to the higher project and operational costs in Malaysia.
Conversely, the performance at its associate ops, largely its independent tank terminal ops, is improving, underpinned by the higher quarter-on-quarter average selling price and utilization. Profitability at its 50% Thailand upstream ops too is also strengthening.
MIBB’s 6%-12% cut in financial year 2023-2025 earnings largely reflects the higher operating expenses outlook on cost issues, thus moderating the 3-year net profit compounded annual growth rate to 9%. Its latest merger and acquisition, the Thailand upstream POEC, is delivering to expectations.
“In our view, the expected payback period for the former is relatively low, at 2-4 years, based on a conservative crude oil profit of USD10-USD20 per barrel,” said MIBB.
Developing Pengerang to its full potential remains its long-term key agenda. Its Phase 3 project, earmarked for LT downstream/ dedicated terminals ops) is gaining traction and will anchor the Group’s LT growth.
It has no intention to sell and monetise its real estate there for a quick gain. Pengerang aside, it will also expand its terminal businesses in Tanjung Langsat, by adding a 24k m3 storage capacity for renewable energy (RE) products; its first foray into the RE segment. Construction of this new plant is expected to be completed by quarter four 2024.
