Dialog Group’s net profit eases to RM508m in FY2022 on higher costs, project losses

Thursday, 18 Aug 2022 8:51 PM MYT

KUALA LUMPUR, Aug 18 — Dialog Group Bhd posted a lower net profit for the financial year ended June 30, 2022 (FY2022) of RM508 million compared to RM543.14 million in the previous year, due to higher project costs and losses in some of its projects.

Revenue, however, rose to RM2.32 billion from RM1.61 billion previously, attributable to increased activities in the upstream, midstream and downstream Malaysian operations, the oil and gas support services provider said in a filing with Bursa Malaysia today.

For the fourth quarter (Q4) ended June 30, 2022, the group’s net profit was also lower at RM118.25 million versus RM138.54 million a year earlier, while revenue increased to RM675.65 million from RM522.14 million previously.

The group said its upstream activities benefited from higher oil prices while Dialog Terminals Pengerang (5) Sdn Bhd’s storage tanks, which were commissioned in February 2021, contributed to higher revenue for the midstream business.

In the downstream business, it said the Malaysian team was busy with various engineering, construction, fabrication, and plant maintenance projects.

“These projects are ongoing, however, they are facing unprecedented challenges due to the Covid-19 pandemic, conflict in Ukraine, inflationary pressure and manpower constraints.

“These had inevitably resulted in cost overruns and project losses,” it said.

On the international front, the group reported higher revenue with increased engineering, construction and plant service activities in Singapore and higher sales of specialist products and services in various countries.

“However, the net profit after tax was lower because of the challenging environment.

“Similar to Malaysia, we are in discussion with our clients for reimbursement and compensation for these project overruns and losses caused by these challenges,” it added.

Meanwhile, in a separate filing, Dialog announced that it was seeking the approval of its shareholders at the forthcoming annual general meeting for the proposed renewal of the authority for the company to purchase up to 10 per cent of the total number of issued shares of Dialog.

“A statement with relevant information of the proposed renewal of share buy-back authority will be disseminated to the shareholders of the company together with the annual report for the financial year ended June 30, 2022, in due course,” it said. — Bernama