DIALOG FALLS THREE SEN AT MID-MORNING

KUALA LUMPUR, Nov 17 -- Dialog Group Bhd was lower at mid-morning on Wednesday after the oil and gas (O&G) company announced a lower net profit for the first quarter (Q1) ended Sept 30, 2021.

At 11.06 am, Dialog fell three sen to RM2.85, with 2.72 million shares changing hands.

Dialog’s Q1 net profit narrowed 11.5 per cent to RM128.81 million from RM146.62 million a year earlier, mainly due to higher project costs.

However, the oil and gas company’s revenue jumped 52.4 per cent to RM505.45 million compared with RM331.66 million in the same quarter previously, contributed by both Malaysian and international operations which saw an increase in business activities as economies reopened.

Maybank IB Research and RHB Research, in separate notes, said Dialog’s Q1 results were within their expectation, hence, they maintained their “buy” call on the O&G company, each with a target price at RM4.90 and RM3.40, respectively.

Maybank IB Research said Dialog’s tank terminal operations remain its core earnings contributor and developing Pengerang to its full potential is key, which will take about 10 years to be fully developed.

“While its green energy agenda is also starting to shape up, a positive for its sustainability roadmap,” it added.

Meanwhile, RHB Research said it maintained its earnings estimates on Dialog as the guidance from O&G’s preliminary assessment indicates that Cukai Makmur (one-time prosperity tax) would have a minimal impact on its numbers, being based on a company basis rather than a group basis.

“There is no environmental, social, and governance (ESG) premium or discount applied -- Dialog’s ESG score of 3.0 is on par with our country median.

“Its recent pledge to achieve net-zero carbon emissions by 2050 is a positive, but we await a clearer roadmap to be declared in the near future,” it said.

RHB said Dialog’s venture into recycling plastic waste to produce packaging materials for the food and beverage industry could be regarded as progress in its journey towards sustainability.

-- BERNAMA