Malaysian terminal operator Dialog has reported a drop in net profits of 23.6% in the last quarter ending 31 December 2020, the second quarterly drop in a row.
It reported a net profit of MYR 122.2 million (€24.9 million), compared to RM160.1 million in the same quarter in 2019. Revenue also fell for the quarter, at MYR 350.9 million, compared to MYR 612.3 million in 2019. Dialog blames a lower profit contribution from a joint venture to the finalisation of its assets costs and the provision for deferred taxation liabilities. It also says that international revenues and profits had suffered as a result of the economic downturn caused by the COVID-19 pandemic.
The Group is continuing work at Pengerang Deepwater Terminals in Johor, Malaysia, which it says continues to offer ‘a compelling value proposition for the establishment of strategic hub operations given its ideal location and one stop integrated hub offering. Phases 1 and 2 of the development are operational and land reclamation for phase 3 is complete. The construction of a storage terminal, common tankage facilities and deepwater marine facilities are on track and expected to be operational by mid-2021.
Dialog is also investing MYR 100 million to add 85,000 m3 of storage capacity to Dialog Terminals Langsat, which will be operational by the middle of 2021. In the longer term the company will add another 200,000 m3 of storage, taking total capacity to more than 1 million m3.
Dialog says in its quarterly report that it remains ‘confident’ in its business model and adds: ‘While the world is suffering from the economic downturn due to COVID-19 global pandemic which had caused demand disruptions of petroleum products, Dialog has maintained a very prudent approach and taken proactive steps in managing the Group’s finances. Capital expenditure and operating expenses have been reviewed and cost reduction measures are ongoing without jeopardising our operations and service delivery to customers.’
The Group expects the economic environment to remain ‘extremely challenging’ but believes it will be profitable at year-end in June.