DIALOG Group Bhd continues to report growth, with its 2020 financial year results coming in above consensus expectations, according to analysts, despite the Covid-19 pandemic leading to border restrictions and lockdowns.
“Dialog’s cumulative FY2020 earnings came in at RM601.8 mil, which was above our and consensus’ full-year FY20 earnings estimates at 106.8% and 108% respectively,” said MIDF Research analyst Noor Athila Mohd Razali.
The analyst also noted that the growth in earnings was mainly due to the improved performance of Dialog’s local Malaysian operation, which was in turn attributable to the higher contribution from its terminal business, namely Dialog Terminals Langsat 1, 2, and 3, as well as the Pengerang Independent Terminal.
According to RHB Investment analyst Sean Lim, Dialog’s management had guided that there is no sign of retracement on independent tank terminal rates at the moment.
The analyst also noted that Dialog has fielded more queries from potential clients, but is expected to take some time to score new dedicated storage contracts, with a preference for clients with strong credit ratings.
AmInvest analyst Alex Goh noted that Dialog’s earnings for FY21F onwards will be driven by the full-year contribution of Pengerang Phase 1E’s 430,000 cubic metre storage which commenced operations in the third quarter of 2019, as well as Tanjung Langsat Terminal 3’s initial 120,000 cubic metre capacity.
“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,” said Goh.
RHB, MIDF, and AmInvest all maintained a buy call on Dialog, with both RHB and MIDF upping their target prices to RM4.25 and RM4.11 from RM4.20 and RM3.83, respectively. AmInvest maintained its fair value of RM4.85
At the end of the trading day, Dialog’s shares were last done at RM3.74, up 8 sen, with 6.15 million shares traded. – Aug 19, 2020
