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Investors were also buoyed by a number of research houses maintaining their “buy” calls on the oil and gas services provider.
It was the third most actively traded stock on Bursa Malaysia with 80.5 million shares changing hands as of 4.22pm. At RM2.16, the group has a market capitalisation of RM12.1 billion.
In its bourse filing yesterday, Dialog announced its net profit rose 16.62% to RM148.29 million for Q2 FY2024 from RM127.15 million a year ago, on the back of higher revenue driven by improved performance from both its Malaysian and international operations.
Quarterly revenue rose 7.8% to RM859.21 million from RM797 million in Q2 FY2023.
The Malaysian operation performed better mainly due to higher production from upstream activities, while the international operation’s better showing was attributed to activities at the Jubail Supply Base in Saudi Arabia, the group said.
“The engineering, construction, fabrication and plant maintenance activities in Singapore, Australia and New Zealand, and sales of specialist products and services in various countries also contributed positively to the group’s better performance in the current financial quarter due to the improved business environment,” it said.
Research analysts anticipate the group will see better margins ahead from new contracts as well as strong earnings prospects even as rising geopolitical tensions support demand for oil storage amid concerns over energy security.
RHB Investment Bank said it expects Dialog’s margins to improve as “legacy contracts slowly phase out” by the end of the financial year ending June 30, 2024 (FY2024).
“The downstream segment should see new contracts and new rates cater to the current high-cost environment,” it said in a note.
Dialog’s share price has been drifting significantly lower over the past year. Just last week, the shares were trading at the RM1.80 level, some 25% lower from a year ago (Feb 20, 2023: RM2.40) as the company grappled with earnings delivery since the Covid-19 pandemic began.
The shares have also been under pressure following its expulsion from the KLCI and MSCI Malaysia indices.
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