KUALA LUMPUR (Nov 21): CGS-CIMB Securities has maintained its “Add” rating on Dialog Group Bhd at RM2.10 with an unchanged target price of RM2.60 and said that Dialog’s earnings may rise in future quarters from the lower-than-expected 1QFY6/23.

In a note on Nov 18, the research house said Dialog Group reported a lower-than-expected 1QFY23 (Jul-Sep 2022) core net profit of RM121 million.

It said despite a maiden RM25 million share of profit from the recently-acquired 50%-owned POES, a Thai onshore oilfield operator, Dialog’s 1QFY23 core net profit only increased by RM8 million against the immediately-preceding 4QFY22 (Apr-Jun 2022).

CGS-CIMB said Dialog is actively pursuing cost compensation and rate increases for its plant maintenance jobs, while its oilfield production should step up moving forward.

“We now think that Dialog has the potential to outperform our current FY23F core net profit forecast, which was reduced by 5.7% in our 15 Nov note.

“ Looking forward for the rest of FY6/23F, we currently forecast average quarterly core net profits of RM126m each for 2QFY23F, 3QFY23F and 4QFY23F, which is just 4% higher than 1QFY23’s RM121 million,” it said.