[%aKBj%]
Research by Public
Outperform – TP RM2.80

“Downstream Set for New Dawn"

Excluding one-off items amounting to RM26.7m, Dialog recorded stronger 4QFY24 core net profit of RM165m, higher by 43.2% YoY and 2.0% QoQ. The stronger result is mainly attributed to the increased production from upstream activities in Malaysia with the revenue from the domestic segment increasingly significantly by 52.3% YoY and 19.7% QoQ. Overall, Dialog recorded full year FY24 core net profit of RM610.6m, broadly in-line with our and consensus estimates at 103%. Moving forward, we expect Dialog to start FY25 on a clean slate without loss-making legacy EPCC projects as we understand that it has been completed by June 2024. Downstream-based earnings could also be lifted by new tariff revision on its Master Service Agreement (MSA) with PETRONAS, starting from July 2024. Further upside could be captured if Dialog is able to secure new tank expansion from Pengerang Deepwater Terminal site. All said, we revise our earnings forecast slightly higher by 4-5% for FY25F-26F and upgrade our call to Outperform with higher TP of RM2.80 (from RM2.61).

Analyst:
Khairul Fahmi, CFA
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$KLSE-DIALOG
Research by Public
Outperform – TP RM2.80

“Downstream Set for New Dawn"

Excluding one-off items amounting to RM26.7m, Dialog recorded stronger 4QFY24 core net profit of RM165m, higher by 43.2% YoY and 2.0% QoQ. The stronger result is mainly attributed to the increased production from upstream activities in Malaysia with the revenue from the domestic segment increasingly significantly by 52.3% YoY and 19.7% QoQ. Overall, Dialog recorded full year FY24 core net profit of RM610.6m, broadly in-line with our and consensus estimates at 103%. Moving forward, we expect Dialog to start FY25 on a clean slate without loss-making legacy EPCC projects as we understand that it has been completed by June 2024. Downstream-based earnings could also be lifted by new tariff revision on its Master Service Agreement (MSA) with PETRONAS, starting from July 2024. Further upside could be captured if Dialog is able to secure new tank expansion from Pengerang Deepwater Terminal site. All said, we revise our earnings forecast slightly higher by 4-5% for FY25F-26F and upgrade our call to Outperform with higher TP of RM2.80 (from RM2.61).

Analyst:
Khairul Fahmi, CFA
khairul.fahmi@publicinvestbank.com.my