[%Suff%] 
Research by Public
Outperform - TP RM2.80

"Jubail Supply Base Disposal"

Dialog announced that its indirect subsidiary, Dialog (Labuan) Ltd has entered into an agreement to dispose its entire 60% equity stake in Dialog Jubail Supply Base Company Limited (DJSB) to its existing local partner, Sedres Trading & Maritime Co Ltd (Sedres) for a total cash consideration of SAR47.5m (RM55.0m). Rationale of the disposal is mainly because of changing landscape in the Jubail Port area in which the current services, heavy lifting work is expected to decrease gradually and to only favour normal logistics. This is in tandem with the rollback of capital expenditure (capex) by Saudi Aramco to sustain the production at a maximum of 12 MMbbl/d due to high spare capacity of 3 MMbbl/d. In the recent 4 years, DJSB has contributed about 3-4% to the Group’s net profit. Hence, we cut our FY26/27 earnings forecast by 3.9%/3.7% respectively reflecting the changes as we assume the entity will cease to be a subsidiary from FY26 onwards. Nevertheless, we maintain our Outperform call with unchanged TP of RM2.80 given the disposal is at 1x NBV.

Analyst:
Khairul Fahmi, CFA
[%dJJv%]

$KLSE-DIALOG 
Research by Public
Outperform - TP RM2.80

"Jubail Supply Base Disposal"

Dialog announced that its indirect subsidiary, Dialog (Labuan) Ltd has entered into an agreement to dispose its entire 60% equity stake in Dialog Jubail Supply Base Company Limited (DJSB) to its existing local partner, Sedres Trading & Maritime Co Ltd (Sedres) for a total cash consideration of SAR47.5m (RM55.0m). Rationale of the disposal is mainly because of changing landscape in the Jubail Port area in which the current services, heavy lifting work is expected to decrease gradually and to only favour normal logistics. This is in tandem with the rollback of capital expenditure (capex) by Saudi Aramco to sustain the production at a maximum of 12 MMbbl/d due to high spare capacity of 3 MMbbl/d. In the recent 4 years, DJSB has contributed about 3-4% to the Group’s net profit. Hence, we cut our FY26/27 earnings forecast by 3.9%/3.7% respectively reflecting the changes as we assume the entity will cease to be a subsidiary from FY26 onwards. Nevertheless, we maintain our Outperform call with unchanged TP of RM2.80 given the disposal is at 1x NBV.

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