KUALA LUMPUR: Dialog Group Bhd
's shares rose in early trade following an improved bottomline in its first-quarter results released yesterday.
The trading stock of the oil and gas services provider rose to an intra-morning high of RM2.08 a share, a nine sen or 4.5% increase over yesterday's closing price of RM1.99.
As 9.35am, the stock was trading at RM2.03 a share after 4.49 million shares changed hands.
Dialog posted a 14.2% increase in net profit for the quarter ended Sept 30, 2024, of financial year 2025 (1Q25) to RM150.97mil from RM132.17mil in the same period last year.
The increase was achieved despite an 18.7% decrease in its revenue to RM634.45mil from the RM780.45mil reported in 1Q24.
In a filing with Bursa Malaysia, Dialog attributed the bottomline improvement to a higher share of profits from its joint ventures and associates, which increased to RM117.74mil during the quarter under review, up 25.34% from RM93.94mil in 1Q24.
Earnings per share in 1Q25 was 2.68 sen. No dividend was declared for the quarter.
Hong Leong Investment Bank (HLIB) Research, reiterated its "buy" call on Dialog with a target price of RM3.12, which was revised higher from RM3.04 previously.
The research firm said the absence of losses in downstream activities should continue lifting the group's bottomline in FY25 even if there were zero external revenue from downstream EPCC. This is given the increasing diversion of resources to internal jobs.
It added that it expects Dialog to ink more tank terminals leases with a few potential offtakers in the short to mid-term (ie PETRONAS’s ongoing development of a biorefinery plant and ChemOne’s condensates refinery in Pengerang).
"We like Dialog for its recurring income business model and its unique position in riding the future expansion of Pengerang via development of tank terminals.
"We look forward to the group securing new long-term dedicated storage tank terminal contracts for its PDT Phase 3 with approximately 500 acres available for future development," said HLIB.
