PUBLIC INVESTMENT BANK
PublicInvest Research Result Review
KDN PP17686/03/2013 (032117)
DIALOG GROUP
Thursday, August 21, 2025
Neutral
DESCRIPTION
An integrated multi-discipline technical service provider in the petroleum and petrochemical industry.
RM1.70
RM1.87
-9.1%
RM1.70
Main
Oil & Gas
7277
DLG MK
Yes
SHARE PRICE CHART
Feb-25 Mar-25 Apr-25 May-25 Jun-25 Jul-25 Aug-25
2.00
1.13-2.52
6,272.8
SHARE PRICE PERFORMANCE
| 1M | 3M | 6M | |
|---|---|---|---|
| Absolute Returns | 11.6 | 19.1 | 13.9 |
| Relative Returns | 9.5 | 17.3 | 15.6 |
KEY STOCK DATA
10,551.8
5,642.7
MAJOR SHAREHOLDERS
16.7
10.6
8.1
Earnings Stabilising
Dialog reported a 4QFY25 core net profit of RM134.5m, down 16.4% YoY due to weaker upstream performance, primarily from lower production volumes and realised oil prices. On a QoQ basis, core net profit rose 2.7%, supported by improved contribution from the downstream segment, which benefited from project completions and cost optimisation efforts. For the full year, core net profit totalled RM421.9m, in line with our expectations but exceeding consensus estimates at 105.7%. The midstream terminal segment remained stable, with utilisation and lease rates for its independent terminals holding above 90% and averaging SGD6.0–6.5/m³ per month. While the downstream segment has showed a steady recovery, we remain cautious until all legacy EPCC projects are fully completed and handed over in 2HCY2025. Looking ahead, earnings visibility remains anchored by recurring midstream contribution, while upside may emerge from progress in upstream and midstream developments, as well as potential new downstream contracts. We maintain our Neutral rating and target price of RM1.70. Dialog also proposed a final dividend of 1.3 sen, bringing the full year payout to 3.1 sen, marginally above our forecast of 3.0 sen.
- Continuous recovery in downstream segment. Dialog’s downstream segment continued its recovery, contributed an estimated 10-15% of overall bottom line in 4QFY25, an improvement from 5-10% in 3QFY25, and rebounding from significant losses in 2QFY25 that were driven by cost overruns during the commissioning phase of legacy projects. In addition, the Group has ceased operations in its ventures related to Malic Acid and recycled polyethylene terephthalate (rPET) due to persistent global oversupply condition. Barring any unforeseen setbacks from its legacy projects, we expect the downstream segment to sustain this level of contribution going forward.
- Resilient midstream terminal segment. The terminal segment continues to demonstrate resilience, with utilisation rates exceeding 90% and leasing rates ranging between SGD6.0-6.5/m³ per month for its independent terminals. This segment is expected to be further reinforced by the commencement of Phase 2 at Dialog Terminals Langsat 3, which will add 150,000m³ of capacity by September 2026, following the successful commissioning of Phase 1 (24,000m³) in February 2025. Additionally, the recently secured Terminal Usage Agreement (TUA) by its 25%-owned joint venture with Pengerang Biorefinery SB is poised to contribute by FY29F.
- Potential new contract could uplift downstream orderbook. The EPCC contract award for the new expansion of PT2SB to support Pengerang Biorefinery SB remains under negotiation. We anticipate that Dialog could secure the contract, potentially valued at around RM1.2bn, based on an estimated 85-90% of USD330m total development cost. Nevertheless, we maintain a cautious view in the near term, as the commissioning phases of Dialog’s legacy EPCC projects continue to carry significant risk of cost overruns until their full completion and handover, expected in 2HCY2025.
KEY FINANCIAL SUMMARY
| FYE Jun (RM m) | 2024A | 2025F | 2026F | 2027F | 2028F | CAGR |
|---|---|---|---|---|---|---|
| Revenue | 3,151.9 | 2,501.6 | 2,607.5 | 2,716.3 | 2,939.1 | -1.7% |
| Gross Profit | 452.4 | 460.9 | 326.0 | 331.3 | 389.4 | -3.7% |
| Pre-tax Profit | 679.1 | 375.9 | 600.2 | 615.9 | 682.7 | 0.1% |
| PATAMI | 575.0 | 303.8 | 538.2 | 551.3 | 609.7 | 1.5% |
| Core PATAMI | 610.7 | 421.9 | 538.2 | 551.3 | 609.7 | 0.0% |
| EPS (Sen) | 10.2 | 5.4 | 9.5 | 9.8 | 10.8 | 1.5% |
| P/E (x) | 18.3 | 34.6 | 19.6 | 19.1 | 17.3 | |
| DPS (Sen) | 4.3 | 3.1 | 3.9 | 4.1 | 4.6 | |
| Div Yield (%) | 2.3 | 1.7 | 2.1 | 2.2 | 2.5 |
Source: Company, PublicInvest Research estimates
Table 1: Results Summary
| FYE Jun (RM m) | 4Q FY25 | 3Q FY25 | 4Q FY24 | QoQ chg (%) | YoY chg (%) | YTD FY25 | YTD FY24 | YTD chg (%) | Comments |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | 608.3 | 578.8 | 810.1 | 5.1 | -24.9 | 2,501.6 | 3,151.8 | -20.6 | |
| Operating Expenses/Income | (428.1) | (406.2) | (627.4) | 5.4 | -31.8 | (2,040.7) | (2,384.2) | -14.4 | |
| EBITDA | 180.2 | 172.6 | 182.7 | 4.4 | -1.4 | 460.9 | 767.6 | -40.0 | |
| Share of JV & Associates | 93.1 | 74.7 | 84.0 | 24.6 | 10.8 | 293.2 | 309.9 | -5.4 | |
| Finance costs | (12.6) | (11.2) | (14.9) | 12.6 | -15.4 | (48.8) | (64.8) | -24.7 | |
| Pre-tax Profit | 181.3 | 153.8 | 170.8 | 17.9 | 6.1 | 375.9 | 679.0 | -44.6 | |
| Taxation | (29.5) | (19.0) | (25.6) | 55.5 | 15.2 | (66.2) | (73.8) | -10.3 | |
| Net Profit | 151.8 | 134.8 | 145.2 | 12.6 | 4.6 | 309.7 | 605.3 | -48.8 | |
| PATAMI | 147.4 | 135.0 | 138.4 | 9.2 | 6.5 | 303.8 | 575.0 | -47.2 | |
| Core PATAMI | 138.1 | 134.5 | 165.2 | 2.7 | -16.4 | 421.9 | 610.6 | -30.9 | |
| EPS (sen) | 2.6 | 2.4 | 2.5 | 9.2 | 6.5 | 5.4 | 10.2 | -47.1 |
Margins (%)
| ppts | ppts | ppts | |||||||
|---|---|---|---|---|---|---|---|---|---|
| EBITDA Margin | 29.6 | 29.8 | 22.6 | -0.2 | 7.1 | 18.4 | 24.4 | -5.9 | Higher margin on downstream steady recovery |
| Pre-tax profit | 29.8 | 26.6 | 21.1 | 3.2 | 8.7 | 15.0 | 21.5 | -6.5 | |
| Net Profit | 24.2 | 23.3 | 17.1 | 0.9 | 7.1 | 12.1 | 18.2 | -6.1 | |
| Core Net Profit | 22.7 | 23.2 | 20.4 | -0.5 | 2.3 | 16.9 | 19.4 | -2.5 |
Source: Company
Table 2: Segmental Result Summary
| FYE Jun (RM m) | 4Q FY25 | 3Q FY25 | 4Q FY24 | QoQ chg (%) | YoY chg (%) | YTD FY25 | YTD FY24 | YTD chg (%) | Comments |
|---|---|---|---|---|---|---|---|---|---|
| Revenue | |||||||||
| Malaysia | 341.0 | 327.7 | 466.7 | 4.0 | -26.9 | 1,438.1 | 1,735.5 | -17.1 | |
| Thailand | 72.2 | 69.9 | 50.3 | 3.2 | 43.4 | 260.2 | 258.0 | 0.8 | |
| Other Asia | 47.3 | 56.7 | 75.1 | -16.6 | -37.0 | 196.6 | 293.3 | -33.0 | |
| Australia / New Zealand | 124.0 | 99.5 | 121.1 | 24.6 | 2.4 | 455.3 | 452.6 | 0.6 | |
| Middle East | 11.9 | 17.6 | 95.0 | -32.3 | -87.4 | 123.0 | 395.4 | -68.9 | |
| Other Countries | 12.0 | 7.4 | 1.8 | 62.4 | 575.0 | 28.5 | 17.2 | 65.9 | |
| JV share of profit | |||||||||
| Malaysia | 86.7 | 64.7 | 74.0 | 34.1 | 17.2 | 259.5 | 269.7 | -3.8 | 4QFY25 recorded RM20-25m gain on forex translation |
| Thailand | 6.4 | 10.0 | 10.0 | -36.5 | -36.1 | 33.6 | 40.1 | -16.2 | |
| Segmental PBT | |||||||||
| Malaysia | 170.6 | 121.3 | 124.3 | 40.7 | 37.2 | 292.8 | 497.2 | -41.1 | 4QFY24 incurred RM22.5m Dialog Diyou PCR impairment |
| Thailand | 9.4 | 14.4 | 13.8 | -34.7 | -31.8 | 43.7 | 56.7 | -22.9 | |
| Other Asia | 9.1 | 11.2 | 7.5 | -18.5 | 22.2 | 13.9 | 3.5 | 299.0 | |
| Australia / New Zealand | (10.4) | 3.9 | 4.3 | -364.0 | -342.5 | 4.2 | 28.2 | -85.0 | 4QFY25 dragged by losses from land revaluation |
| Middle East | 0.8 | 1.9 | 20.6 | -58.8 | -96.3 | 16.3 | 90.5 | -82.0 | |
| Other Countries | 1.8 | 1.2 | 0.4 | 55.1 | 398.3 | 4.9 | 3.0 | 64.1 | |
Source: Company
KEY FINANCIAL DATA
INCOME STATEMENT DATA
| FYE Jun (RM m) | 2024A | 2025A | 2026F | 2027F | 2028F |
|---|---|---|---|---|---|
| Revenue | 3,151.9 | 2,501.6 | 2,607.5 | 2,716.3 | 2,939.1 |
| Cost of sales | -2,699.5 | -2,120.1 | -2,281.6 | -2,385.0 | -2,549.7 |
| Operating Profit | 434.1 | 381.5 | 336.5 | 342.3 | 401.3 |
| Associates & JV | 309.9 | 293.2 | 312.2 | 304.6 | 294.8 |
| Finance Costs | -64.8 | -48.8 | -48.5 | -30.9 | -13.4 |
| Pre-tax Profit | 679.1 | 375.9 | 600.2 | 615.9 | 682.7 |
| Income Tax | -73.8 | -66.2 | -31.7 | -34.3 | -42.7 |
| Effective Tax Rate (%) | 10.9 | 17.6 | 5.3 | 5.6 | 6.2 |
| Core PATAMI | 610.7 | 421.9 | 538.2 | 551.3 | 609.7 |
Growth
| Revenue | 5.0% | -20.6% | 4.2% | 4.2% | 8.2% |
| Operating Profit | 65.5% | -12.1% | -11.8% | 1.7% | 17.2% |
| Core PATAMI | 20.7% | -30.9% | 27.6% | 2.4% | 10.6% |
Source: Company, PublicInvest Research estimates
BALANCE SHEET DATA
| FYE Jun (RM m) | 2024A | 2025A | 2026F | 2027F | 2028F |
|---|---|---|---|---|---|
| Property, Plant & Equipment | 2,794.1 | 2,644.0 | 2,347.3 | 2,066.0 | 1,803.7 |
| Cash and Cash Equivalents | 1,572.8 | 1,669.9 | 1,461.8 | 1,601.5 | 1,762.6 |
| Receivables, deposits and prepayment | 789.2 | 483.4 | 785.9 | 818.7 | 885.8 |
| Other Assets | 3,974.2 | 3,889.6 | 4,187.0 | 4,494.3 | 4,793.4 |
| Total Assets | 9,130.3 | 8,686.9 | 8,782.0 | 8,980.4 | 9,245.5 |
| Payables | 822.0 | 809.0 | 745.2 | 785.9 | 865.4 |
| Borrowings | 1,202.6 | 1,085.2 | 898.8 | 712.4 | 525.9 |
| Tax Liabilities | 67.1 | 24.2 | 18.9 | 18.9 | 18.9 |
| Other Liabilities | 531.1 | 524.9 | 530.1 | 530.1 | 530.1 |
| Total Liabilities | 2,622.7 | 2,443.2 | 2,193.0 | 2,047.3 | 1,940.4 |
| Shareholders’ Equity | 6,507.6 | 6,243.7 | 6,589.0 | 6,933.1 | 7,305.1 |
| Total Equity and Liabilities | 9,130.3 | 8,686.9 | 8,782.0 | 8,980.4 | 9,245.5 |
Source: Company, PublicInvest Research estimates
PER SHARE DATA & RATIOS
| FYE Jun | 2024A | 2025A | 2026F | 2027F | 2028F |
|---|---|---|---|---|---|
| Book Value Per Share | 1.2 | 1.2 | 1.2 | 1.2 | 1.3 |
| NTA Per Share | 1.0 | 1.0 | 1.0 | 1.1 | 1.1 |
| EPS (Sen) | 10.2 | 5.4 | 9.5 | 9.6 | 10.6 |
| DPS (Sen) | 4.3 | 3.1 | 3.9 | 4.0 | 4.6 |
| Payout Ratio () | 42.2 | 40.0 | 41.0 | 42.0 | 43.0 |
| ROA () | 6.6 | 5.0 | 6.4 | 6.4 | 6.8 |
| ROE () | 12.0 | 8.3 | 10.0 | 9.5 | 10.0 |
Source: Company, PublicInvest Research estimates
DISCLAIMER
This document has been prepared solely for information and private circulation only. It is for distribution under such circumstances as may be permitted by applicable law. The information contained herein is prepared from data and sources believed to be reliable at the time of issue of this document. The views/opinions expressed herein are subject to change without notice and solely reflects the personal views of the analyst(s) acting in his/her capacity as employee of Public Investment Bank Berhad (“PIVB”). PIVB does not make any guarantee, representations or warranty neither expressed or implied nor accepts any responsibility or liability as to its fairness liability adequacy, completeness or correctness of any such information and opinion contained herein. No reliance upon such statement or usage by the addressee/anyone shall give rise to any claim/liability for loss of damage against PIVB, Public Bank Berhad, its affiliates and related companies, directors, officers, connected persons/employees, associates or agents.
This document is not and should not be construed or considered as an offer, recommendation, invitation or a solicitation of an offer to purchase or subscribe or sell any securities, related investments or financial instruments. Any recommendation in this document does not have regards to the specific investment objectives, financial situation, risk profile and particular needs of any specific persons who receive it. We encourage the addressee of this document to independently evaluate the merits of the information contained herein, consider their own investment objectives, financial situation, particular needs, risks and legal profiles, seek the advice of their, amongst others, tax, accounting, legal, business professionals and financial advisers before participating in any transaction in respect of any of the securities of the company(ies) covered in this document.
PIVB, Public Bank Berhad, our affiliates and related companies, directors, officers, connected persons/employees, associates or agents may own or have positions in the securities of the company(ies) covered in this document or any securities related thereto and may from time to time add or dispose of, or may be materially interested in, any such securities. Further PIVB, Public Bank Berhad, our affiliates and related companies, associates or agents do and/or seek to do business with the company(ies) covered in this document and may from time to time act as market maker or have assumed an underwriting commitment in the securities of such company(ies), may sell them or buy them from customers on a principal basis, may have or intend to accommodate credit facilities or other banking services and may also perform or seek to perform investment banking, advisory or underwriting services for or relating to such company(ies) as well as solicit such investment advisory or other services from any entity mentioned in this document. The analyst(s) and associate analyst(s) principally responsible for the preparation of this document may participate in the solicitation of businesses described aforesaid and would receive compensation based upon various factors, including the quality of research, investor client feedback, stock pickings and performance of his/her recommendation and competitive factors. Hence, the addressee or any persons reviewing this document should be aware of the foregoing, amongst others, may give rise to real or potential conflicts of interest.
