KUALA LUMPUR: Dialog Group Bhd’s first quarter (Q1) earnings of RM125 million in the fiscal year 2022 (FY22) were in line with expectations, accounting for 23 per cent of RHB Research’s and 21 per cent of consensus full-year estimates.
In a note today, the bank-backed research firm expects earnings growth to resume in FY22-FY23 on the back of revenue recovery and better tank terminal earnings contributions.
“Its recent pledge to achieve net-zero carbon emissions by 2050 is positive, and we await a clearer roadmap on this being declared in the near future,” it said.
Besides that, Dialog’s venture into recycling plastic waste to produce packaging materials for the food and beverage (F&B) industry can be regarded as progress in its journey towards sustainability.
RHB Research said Dialog’s recovery in revenue was impacted in Q1 FY22, especially in Australia and New Zealand, but the downstream activities are expected to still pick up in FY22-FY23.
It said margins could be still under pressure on elevated costs related to the Covid-19 pandemic.
Meanwhile, RHB Research said Pengerang Independent Terminals (PITSB) is still operating at a 90 per cent utilisation rate, and the latest monthly storage rates are around SG$6 per cubic meter (cbm).
The 85,000 cbm capacity expansion in Langsat 3 is expected to contribute to total numbers by the end of this year.
“The gradual re-opening of borders, in our view, could expedite the process of locking in the new tank terminal capacity expansion,” it added.
RHB Research maintained its ‘Buy’ call on Dialog with a higher target price of RM3.40 from RM3.14 previously.
Source: New Straits Times
