Malaysian terminal operator Dialog has reported a revenue of RM 331.7 million (€70.1 million) for the first quarter of the year ending 30 June 2022, up 52.4% on Q1 for the previous financial year.
The increase is down to increased upstream, midstream and downstream activities. Higher prices and production volumes increased upstream revenues, while the midstream revenues benefitted from the newly commissioned 430,000 m3 Dialog Terminals Pengerang 5, which is dedicated to BP Singapore.
However, overall profits after tax were down by 11.5% compared to the same quarter last year, to RM 131 million. Dialog says this is due to higher project costs. Various engineering, construction and fabrication, and plant maintenance projects are ongoing, which have been affected by COVID-19 regulations, supply chain disruption, and higher materials and logistics cost, which affect the project schedules and margins. Profits before tax are also down compared to the previous quarter, down to slightly lower revenues.
Dialog’s focus remains on the development of its Pengerang Deepwater Terminals facility, to create the largest petroleum and petrochemical hub in the Asia Pacific region. It has opened Phase 3, which has dedicated petroleum and petrochemical storage facilities for medium- to long-term customers, while also supporting downstream operations such as those of the refinery and petrochemical plants within the Pengerang Integrated Petroleum Complex. A further 500 acres are available for development.
Dialog is investing RM 100 million to add 85,000 m3 of storage to the existing 770,000 m3 currently available at Dialog Terminals Langsat. The extra capacity should be available by the end of 2021. 17 acres of land is still available at the site which could support a further 200,000 m3 of storage. The company has a long-term strategy to expand its midstream terminals business.
Other highlights from the quarter include a joint venture agreement with Morimatsu Technology and Service Company to collaborate and provide one-stop engineering and fabrication services of critical process equipment, pressure vessels and modular plant/facility solutions both locally and internationally from its facility in Pengerang, Johor which has a private load out jetty. It also entered into a shareholders’ agreement with Diyou PCR to form a special purpose vehicle to build, own and operate a food grade recycled polyethylene terephthalate (PET) pellets production facility. It will be Dialog’s first investment in its sustainable and renewable business.
‘The global economic outlook is showing signs of improvement. However, the impact of the prolonged COVID-19 pandemic as well as supply chain disruption and inflation are dampening the overall outlook and it is uncertain how long this will last. 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,’ says the company in a statement, adding: ‘We are optimistic that economic activities will pick up and barring any unforeseen circumstances, the group is confident that its performance will remain profitable for the financial year ending 30 June 2022.’