Tuesday 14 August 2012

Dialog Group - 4Q12 in line with expectation


Period    4Q12

Actual vs. Expectations
 The 4Q12 earnings came in within ours as well as the market consensus expectations. 

 The reported FY12 net profit of RM177.0m was 5% and 1% below ours and that of the market consensus. 

Dividends   A final net DPS of 2.0 sen has been declared in 4Q12 vs. the 1.1 sen net in 3Q12 and 1.8 sen net in 4Q11.

 This brings FY12 full year net DPS to 3.1 sen, the same as last year, which is within our estimate.

Key Results Highlights
 4Q12 net profit jumped 20% QoQ to RM49.6m while revenue rose 19% over the quarter due largely to improved EPCC jobs. There was also a better performance from the Specialist Products & Services segment.

 YoY, the 4Q12 reported results gained 11% while revenue leapt 33% from a year ago. This was partly due to the newly acquired New Zealandbased Fitzroy Engineering Group Ltd (acquired in Apr 2011) and the start of LT2 in Jan 2012.

 FY12 net profit rose 16% to RM177.0m on the back of a 35% hike in revenue to RM1.63b. This was attributable mainly to 1) the newly acquired Fitzroy; 2) new incomes from LT1 Phase 3 (started in Sep 2011) and LT2 and 3) the start of EPCC jobs from LT3 and Pengerang CTF. 

Outlook   Forward earnings are expected to reach a new high in FY13 with the full year earnings impact of LT2, the start of EPCC jobs for LT3, Pengerang CTF and fabrication job for Balai Marginal Fields.

These in-house EPCC/fabrication jobs should keep Dialog busy until 2014. 

Change to Forecasts  No changes to our FY13-FY14E estimates  

Rating  MAINTAIN OUTPERFORM

Valuation    We are maintaining our price target of RM3.09/SOP a share.

Risks   Delays in its in-house EPCC jobs that will impact its future recurring incomes negatively.  

Source: Kenanga 

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