Dialog eyes expansion
18 Oct 2021
Dialog Group Bhd will continue to focus on diversifying its businesses in the energy sector and expanding into renewable energy to ensure that the group is able to weather the different economic cycles.
Given the improving market outlook, it said the time was right for it to expand and deepen its upstream investments in line with its diversified business model strategy.
“Increased upstream activities also provide added opportunities for us to participate in other parts of the value chain in the field redevelopment cycle, particularly in the provision of engineering and specialist technical services,” executive chairman Tan Sri Ngau Boon Keat said in the company’s 2021 annual report.
In the midstream business, it will also focus on the ongoing development of Pengerang Deepwater Terminals into the largest petroleum and petrochemical hub for the Asia-Pacific region.
He noted that global oil demand is forecast to continue its rebound from 2021, albeit at a lower level, of which Asia is estimated to account for 90% of oil demand growth through to 2026.
According to the International Energy Agency, following the unprecedented collapse in demand in 2020 spurred by the Covid-19 crisis, world oil markets are now rebalancing.
However, Ngau added that the overall economic environment is expected to remain extremely challenging in the short to medium term as the prolonged Covid-19 pandemic and spread of new variants are dampening the outlook.
He also pointed out that the outlook for oil demand has shifted due to rapid changes in behaviour caused by the pandemic and the global focus towards a more sustainable low-carbon future.
“In view of the above, Dialog will remain focused and steadfast in the pursuit of key long-term strategies, which have helped the group weather different economic cycles in the past,” he said.
These strategies include diversification across the upstream, midstream and downstream businesses of the energy sector, expansion into renewables, including clean and green energy as well as recycling ventures as part of the circular economy, and growing its long-term recurring income across all businesses.
He also said the group will look into the active recruitment, development and retention of talent and seek to cultivate strong relationships with its stakeholders.
“With our dedicated management team and the long-term business strategies above, we remain confident that our business is well structured to manage and sustain itself through periods of economic uncertainty, oil price volatility and currency movements.”
While the world experienced lockdowns during the prolonged Covid-19 pandemic, Ngau noted that the group’s businesses have mostly been categorised as essential in the respective countries where it operates.
Therefore, the group was able to continue its operations throughout the pandemic at various capacities in compliance with the related local health requirements.
“During this period, the group has continued to take precautionary measures to preserve cash flow, financial strength and stability. These include enhanced credit risk monitoring controls, reprioritisation of capital and operational expenditures, and ongoing cost management initiatives,” he said.
Source: The Star