Dialog - worst is over?

Its bottom line took a hit from its Singapore operations, as the company is seen as one of the more cautious oil and gas players in Malaysia. But market observers opine that this is just a hiccup and its growth is intact.

It is more stringent in Singapore where it experienced unexpected delays.

It has presence in 14 countries …

It is an integrated technical service provider in the oil and gas mad petrochemical industry posted rm22 million losses in its Singapore operations for two consecutive quarters ended March 31 2013.

These losses were due to cost overruns by its plant maintenance project in Singapore’s dragging down its overall earnings.

The CEO insisted that the worst is behind the company as the project has been completed.

The underlying weakness came from higher costs related to tank terminal operations in Tanjung Langsat and the new Jebel Ali supply base, cost overruns in Singapore operations and startup costs for its Bayan Enhanced Oil Recovery JV.

Critics however said that dialog’s long term visibility underpinned by its catalytic Pengerang project, but there is limited upside from current (July 2013) levels given its stretched valuation of 30 times FY2014. Also there is unlikely to be contribution from its upstream projects … Balai cluster fields and Bayan redevelopment in the near term.

Its FY2014 growth will be led by the Pengerang Deepwater Terminal project in Johor (Phase 1 & 2).

In the upstream sector, Dialog’s 32% owned BC Petroleum Sdn Bhd is progressing well. It has also commenced activities for the redevelopment of the Bayan field.

The company saw a decrease in cash and cash equivalents of rm154 million as its bank borrowings of rm325 million were insufficient to cover investment costs. As a result of the investments its cash and cash equivalents stood at rm424 million as of March 31 2013 versus rm691 million a year ago.

Dialog’s major shareholder include evecutive chairman Ngau Boob Keat holds an indirect stake of 22.2% while the EPF holds 15.46%.