MARC has reaffirmed Dialog Group Berhad (“DIALOG”)’s corporate credit rating at AA-, with a positive outlook.  The rating is supported by DIALOG’s commendable balance sheet and healthy cash flow position resulting from the Group’s prudent financial policy as well as its strong competitive position and safety track record in the highly specialized oil, gas and petrochemical industries. The rating carries a positive outlook due to its strong revenue growth over the past years, improving profitability and the continuous growth potential in the Group’s marketing and technical services as well as the specialist services business units.  The rating outlook is also premised on the performance of the Group’s recent acquisitions and joint ventures to widen its territorial coverage and product range.
 
Since 2002, DIALOG has developed from being a major engineering, procurement, construction and commissioning (EPCC) contractor into a one-stop integrated service provider to the oil, gas and petrochemical industry; specializing in the provision of specialist technical services and products to both the upstream and downstream sectors of the industry. This move which represents DIALOG’s proactive effort to diversify its income sources has been successful.  The marketing and technical services business unit is now the main contributor to DIALOG’s revenue and profit.  Going forward, DIALOG will continue with its current strategy of:

o        technology acquisition and partnership;
o        strengthening and widening its range of services and products; and
o        overseas expansion

DIALOG’s competitive advantage lies in its capabilities in rendering a diverse range of services within the oil and gas industry. Supported by 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.

During the period under review, DIALOG achieved 37.6% growth in its revenue. Profit before tax similarly increased by 38.4% in tandem with the revenue growth.  Operating profit margin improved to 7.6% reflecting the improved fundamentals of the industry and DIALOG’s transition into an integrated services provider, which is also depicted by the movements in historical profitability during the past four fiscal years as shown below. MARC draws comfort from DIALOG’s solid capitalisation and cash flow position, particularly its minimal debt leverage position for the past few financial years.