MARC reaffirms Dialog Group Berhad (DIALOG)’s corporate credit rating of ‘AA-‘, reflecting the Group’s strong capitalization and cash flow position; its good competitive position in the highly specialized oil, gas and petrochemical industries; and its commendable operational performance and safety track record.

Incorporated in 1989, DIALOG is principally an investment holding company and a component stock of the Bursa Malaysia’s Composite Index. During FY2004, the Group continued to diversify (within the oil, gas and petrochemical industry) into non-EPCC (engineering, procurement, construction and commissioning) businesses to achieve a more balanced revenue mix. In tandem with that, DIALOG is repositioning itself into a one-stop integrated service provider; specializing in the provision of specialist technical services and products to support the upstream and downstream activities in the oil, gas, and petrochemical industries. The repositioning provides DIALOG with recurring and stable income stream and requires lower capital expenditures.

DIALOG’s competitive advantage lies in its capabilities in rendering a diverse range of services within the industry. Through the Group’s tie-ups and alliances with various foreign technology partners, DIALOG has demonstrated credibility in completing various jobs on time; within budgeted cost; and within quality and safety parameters. The technology know-how and proven track record serve as barriers to enter the industry.

In FY2004, DIALOG improved its profitability through higher contribution from Specialist Technical Services and Products, which yielded higher margin; and profit and dividend contribution from Kertih Terminals Sdn Bhd, an associated company. Future capital expenditure will be mainly concentrated on the development of new petrol stations, which are expected to be funded from internal cashflows and a small portion in borrowings. With minimal debt-servicing requirement and a solid cash position, the Group’s cashflow protection measures remain solid. The low debt leverage, comfortable amount of unutilized credit lines and growing capital base accord the Group with good financial flexibility.