Dialog's 4QFY22 earnings delivery to remain steady
KUCHING: Dialog Group Bhd's (Dialog) fourth quarter of financial year 2022 (4QFY22) earnings delivery has been projected to remain steady, with analysts noting that further development of Pengerang will be a key catalyst.
AmInvestment Bank Bhd (AmInvestment Bank) expects the group's 4QFY22 earnings delivery to remain steady given the full-year contribution of Dialog Pengerang Phase 5's 430,000 cubic metre capacity together with Tanjung Langsat 3 terminal's additional 85,000 cubic metre capacity by the end of 2021 against the backdrop of rising global economic activities.
“Longer term, the group still has ample acreage to double its Pengerang storage capacity with a remaining 500-acre zone comprising reclaimable land and the adjoining buffer zone,” AmInvestment Bank noted.
The research arm of Kenanga Investment Bank Bhd (Kenanga Research) also opined that further developments of Pengerang Phase 3 will be Dialog's key focus.
Kenanga Research gathered that Phase 3 is designated for dedicated terminals serving midto-long-term clients.
“With the soon expected start-up of Petronas' Pengerang Integrated Complex (PIC), we believe this would help Dialog to expedite talks with potential partners,” the research arm said.
“Dialog also has another 500 acres of land in the Pengerang area available for further developments for the longer term.
“Meanwhile, with the current expansion of its Langsat Terminals now completed, Dialog still has another 17 acres of land in Langsat, which could potentially add another 200,000 cubic metres of storage capacity in the future – thus bringing Langsat's total capacity to approximately one million cubic metres.”
AmInvestment Bank highlighted that looking forward, the group is endeavouring to recover the additional costs caused by Covid-19-related restrictions from clients together with higher raw material costs.
Nevertheless, the research firm has adopted more conservative margin assumptions given that past cost-compensation negotiations with clients are likely to be protracted.
“Even so, we are confident that Dialog, which has demonstrated savvy prudence during the pandemic, can safely navigate the current inflationary regime with further relaxation in foreign labour constraints.”