By Ying Xian Wong


Shares of Dialog Group Bhd. fell steadily in the morning session, with analysts having mixed views on the company's outlook after muted quarterly earnings.

The stock was 5.8% lower at 2.43 ringgit ($0.55) by the midday trading break Friday, putting the company on track for its biggest one-day percentage loss since September while taking 12-month losses to nearly 14%.

The oil and gas tank terminals operator said late Thursday that net profit fell 0.6% from a year earlier, with higher project and operation costs, including from higher material and labor costs, cutting into a 46% jump in revenue.

Affin Hwang Investment Bank analyst Tan Jianyuan downgraded his rating to hold from buy, citing a 24% rise in the share price over the past three months and saying in a note that he sees "better value elsewhere." He also thinks development of the Pengerang Phase 3 project remains slow in securing new customers, which "may limit any further valuation upside from the current level."

MIDF cut its fiscal 2023 and 2024 earnings forecasts for Dialog by 11% and 12%, respectively, citing results that came in below its expectations. Still, it maintained a buy rating on expectations for an overall robust oil market in 2023, with demand recovering in China and Europe, and for Dialog's growing potential in its storage tank farm business and new initiatives related to the government's sustainability goals, among others.

Kenanga Investment Bank analyst Steven Chan said he thinks Dialog's long-term outlook remains largely intact, with midstream assets to "provide a degree of earnings defensiveness and resiliency" and Pengerang developments to serve as the company's key growth catalyst. Kenanga kept an outperform rating on the stock.


Write to Ying Xian Wong at yingxian.wong@wsj.com


(END) Dow Jones Newswires

02-17-23 0137ET