02 DIALOG GROUP BERHAD Annual Report 2020 THE PENGERANGSTORY • • • • • Why Pengerangwastheperfectlocation: next 30 the years. in growth demand Pacific Asia capture to terminal petroleum deepwater Veryhandling of (“VLCC”) capable Carriers Crude Large a develop asuitable to as location Pengerang identified DIALOG 2007, In OVERVIEW petrochemical hub Proximity All-weather port Naturally shelteredharbour Deepwater (upto24metres) jetty facilities Next tointernationalshippinglanes PHASE ONE PITSB to Singapore – existing major refining and refining major existing – Singapore to “BUILDING THEFUTURETODAY” OVERVIEW PHASE TWO PT2SB PLNG2 KEY MESSAGES 3A still unfolding. for DIALOG and its partners. And the Pengerang Story is reality become now has 2007 in dream a as began what With continuous support from the Malaysian Government, over RM100billiontodate. totalling investments with (“PIPC”), Complex Petroleum Integrated has Pengerang the of growth the catalysed (“PDT”) and investors international and Terminalsdomestic both attracted Deepwater Pengerang Darul Johor of Government Ta’zim. State the Understanding with of (“MOU”) Memorandum when the 2009 signed June DIALOG in launched was development The PHASE 3& PHASES FUTURE MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT PHASE THREE N in April 2014 with an oil storage capacity of 1.3 million m million 1.3 of capacity operations storage oil an with commenced 2014 April in which terminal independent An PHASE ONE 3,0 m 430,000 facility.Another jetty deepwater dedicated a with complete in January2020. SUSTAINABILITY REPORT 3 trg cpct ws ul operationalised fully was capacity storage EVENT &HIGHLIGHTS 3
1.7 millionm CORPORATE GOVERNANCE PHASE 1:PETROLEUMTERMINAL Current Storage Capacity 3 Commenced ADDITIONAL INFORMATION 2014 Operations 03 DIALOG GROUP BERHAD Annual Report 2020 04 DIALOG GROUP BERHAD Annual Report 2020 PHASE TWO 1.3 millionm 400,000 m Current Storage PETROCHEMICALS TERMINAL Capacity Capacity Storage PHASE 2B:LNGTERMINAL PHASE 2A:PETROLEUM&
3 OVERVIEW 3 2018/2019 Commenced Commenced Operations Operations 2017 KEY MESSAGES
In Phase 2B, the Liquefied Natural Gas (“LNG”) Gas m Natural 200,000 Liquefied of units tank storage the LNG 2 with facilities regasification 2B, Phase In 2017. . mlin m million of 1.3 capacity storage with terminal petrochemicals and petroleum dedicated the of construction 2A, Phase For operations commencedin2018. 3 each commenced operations in November in operations commenced each MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT 3 omne i 21. Commercial 2015. in commenced
erlu dwsra mnfcuig ete n raie our international petroleum and petrochemical hubofthefuture. an into realise Pengerang vibrant transforming and of a vision centre collective developing manufacturing to downstream committed petroleum strongly our are with Together we further phases. the partners, future for and 3 earmarked Phase been of already development have zone buffer and the land reclaimed comprising land of acres 500 remaining The and petrochemicalplantswithinthePIPC. storage terminals for medium to long term clients, including refinery for customers potential Phase 3, pursue which will actively consist of to dedicated continues petroleum and Group petrochemical The THE FUTUREOFPDT PHASE THREE with expectedcommissioninginmid-2021. Limited Pte. Singapore BP with secured been also has Agreement facilities at Jetty 3, for Phase 3. Alongside this, a Long Term Storage marine deepwater and infrastructure, shared with facilities tankage common terminal, storage a for progress in is Construction 2019. of end the at scheduled as completed been has reclamation Land SUSTAINABILITY REPORT EVENT &HIGHLIGHTS CORPORATE GOVERNANCE 430,000 m 300 acres Common Tankage FacilitieswithShared PHASE 3:LANDRECLAMATION Capacity Storage PHASE 3A: CURRENT PHASE 3A:CURRENT Area Infrastructure andJetty3 DEVELOPMENT 3 ADDITIONAL INFORMATION Completed Completion 2019 2021 Target 05 DIALOG GROUP BERHAD Annual Report 2020 06 DIALOG GROUP BERHAD Annual Report 2020 We create value from our 6 identified capitals through the through capitals identified 6 our from value implementation of5keystrategies: create We The iconsaboveareusedthroughoutthisIntegratedReport. owr-okn eet ad icmtne mgt o ocr n the in occur not way theGroup expects,oratall. might future circumstances of and guarantee events a forward-looking not are and assumptions, and uncertainties to Due management developments. or events performance the Group’s future of to respect views with current the reflect statements by their nature subject to uncertainties and risks. These forward-looking and beliefs, are statements Such Group’smanagement. the to by management made assumptions Group’s the relating on based statements are that forward-looking Group the some contains report This FORWARD-LOOKING STATEMENTS CROSS REFERENCES ABOUT OURREPORT 6 CAPITALS M N H S F I T reports more informationwithinthe Natural Manufactured Social Human Intellectual Financial ells youwherecanfind yblss ILGs tegh aiiy and on ourlong-termgoals. agility delivering on focused remaining strength, whilst optimism design by DIALOG's cover The symbolises on pandemic. COVID-19 brought the challenges the of represents midst unprecedented the report in year's today standing this DIALOG's of theme The RESILIENT 5 STRATEGIES TECH R D S T OVERVIEW for useinourbusinesses Development of proprietary Stakeholders Cultivating strongrelationshipswith retention ofTalent Active recruitment,developmentand Growing longterm midstream anddownstreamsectors Diversification acrosstheupstream, www. www.dialogasia.com more informationonlineat Tells youwherecanfind Recurring income KEY MESSAGES Technology
• • • 2 the is This INTEGRATED REPORTING relevant attimeofpublication. and accurate is that report information This presents 2020. September 21 of date practicable last the to up and 2020 June 30 ended year financial the to for relevant stakeholders seek is that We information present segments. to business our and all of the Group’s primary business activities covering report main the is Report Annual (“DIALOG”)’s BERHAD GROUP DIALOG SCOPE website which is available to all stakeholders on our report our on feedback your welcome We FEEDBACK • • WITH REGULATIONS COMPLIED Malaysia’s Bursa with Sustainability ReportingGuide. accordance presented in been have businesses its and the DIALOG for regard, matters sustainability our material this and In responsible manner. managing holistic, sustainable a in in business believes DIALOG REPORTING SUSTAINABILITY value creation story for all our stakeholders. better convey our Group’s performance and continue to enhance will our reporting We and aim journey. to Reporting Integrated our
MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT Guide Bursa Malaysia’ Standards International FinancialReporting Malaysian FinancialReportingStandards Companies Requirements Bursa MalaysiaMainMarketListing
www www. nd Act 2016 year since we embarked on embarked we since year s Sustainability Reporting .dialogasia.com 40 38 36 35 31 26 25 21 20 14 ear FinancialHighlights 12 10 10 KEY MESSAGES 08 08 06 02
TABLE OFCONTENTS Global Presence Creation Our BusinessModelforV What W Corporate Milestones (International) Management’ (Malaysia) Management’ Profile Key SeniorManagement’ Board ofDirectors’ Board ofDirectors Statement Executive Chairman’ Support Highlights C FY2020 BusinessHighlights 10-Y V Who W About OurReport The PengerangStory ision/Mission/Values ovid SUSTAINABILITY REPORT -19 Community e Are e Do s Profile s Profile Profile s
s alue
66 65 SUSTAINABILITY REPORT 58 50 42 AND ANALYSIS DISCUSSION MANAGEMENT 86 83 79 70 68 62 56 49 48 46 EVENT &HIGHLIGHTS DIALOG Headquarters
Responsibility Corporate Social Learning &Development Our People Environment Health, Safety& Economic Performance Sustainability Governance About Strategic Key RisksandOpportunities A Operations FY2020 Reviewof 5-Y Key PerformanceIndicators Review Financial Performance Chief OperatingOfficer Statement from wards and Achievements ear FinancialSummary This Report Alliances The Group’s
CORPORATE GOVERNANCE ANNUAL GENERAL MEETINGOF
DIALOG GROUP BERHAD www downloaded asaPDFfileorviewedat This Integrated Annual Reportcanalsobe
121 116 114 ADDITIONAL INFORMATION 98 CORPORATE GOVERNANCE 94 EVENTS &HIGHLIGHTS 123 1 1 1 109 101 100 99 96 126
32 10.00 a.m. Wednesday 18 November2020 venue ofDIALOG Tower streaming fromthebroadcast Virtual MeetingthroughLIVE 19 15 11 www.
- Proxy Form of Notice of Group CorporateDirectory List of Shareholdings Information Enhancing ShareholderV Share Performance Internal Control Statement onRiskManagementand Audit CommitteeReport Statement Corporate GovernanceOverview Organisation Structure Corporate Structure Corporate Information Media Highlights Calendar ofEvents of Statement Meeting andDividendEntitlement The Company The 32 .dialogasia.com Top Ten Properties ND The 32 nd Accompanying The Notice Annual GeneralMeeting nd Annual General ADDITIONAL INFORMATION
alue
07 DIALOG GROUP BERHAD Annual Report 2020 OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS
WHO WE ARE KEY MESSAGES
10 10-Year Financial Highlights 10 FY2020 Business Highlights 12 COVID-19 Community Support
DIALOG is a leading integrated technical service provider to the upstream, midstream and downstream Highlights sectors in the oil, gas and petrochemical industry. Established in 1984, DIALOG has grown both organically 14 Executive Chairman’s and through strategic alliances with internationally-renowned technology partners. We serve a diverse range of Statement customers that include multinational oil majors, national oil companies as well as multinational engineering and 20 Board of Directors service providers located throughout the world. Our comprehensive variety of services include Upstream Assets 21 Board of Directors’ Profile and Services, Midstream Assets and Services - Tank Terminals and Supply Base, Engineering, Procurement, 25 Key Senior Management’s Construction and Commissioning, Plant Maintenance & Catalyst Handling Services, Specialist Products & Profile
Services, Fabrication, Digital Technology and Solutions. DIALOG is listed on the Main Market of Bursa Malaysia 26 Management’s Profile
08 with a market capitalisation of approximately RM22 billion (September 2020). DIALOG was included into the (Malaysia) FBM KLCI in June 2018. 31 Management’s Profile (International) 35 Corporate Milestones OUR VISION 36 What We Do To be the leading integrated technical service provider to the upstream, midstream and downstream sectors 38 Our Business Model for Value in the oil, gas and petrochemical industry in Malaysia and internationally. Creation 40 Global Presence
OUR MISSION
• To continuously enhance competitiveness, competence and leadership in the provision of our services. • We shall honour our commitment to quality and timely job completion as well as unfailing protection of health, safety and the environment. • We shall, as responsible and caring corporate citizens, actively support the Nation’s aspirations and serve the best interests of the communities in which we work and live. • We shall continuously develop and retain a highly skilled, motivated and professional workforce to generate the dynamics that will propel our business into strategic growth areas with global reach and a diversified Annual Report 2020 BERHAD DIALOG GROUP sustainable earnings base.
OUR VALUES
Integrity HSE QUALITY COMPETENCY EXCELLENCE
Feature wall, DIALOG Headquarters 10 DIALOG GROUP BERHAD Annual Report 2020 REVENUE (RM’ million) FY2020 BUSINESSHIGHLIGHTS 10-YEAR FINANCIAL HIGHLIGHTS ‘11 1,208 ‘12 1,634 ‘13 2,237 ‘14 2,552 ‘15 2,358 ‘16 2,534 ‘17 3,393 ‘18 3,111 ‘19 OVERVIEW 2,386 ‘20 2,303 BAYAN PETROLEUM T HALLIBURTON O INCREASED STAKE IN 95% & PROFIT AFTER TAX (RM’ million) PROFIT BEFORETAX ‘11 160 201 MALAYSIA ‘12 rftBfr a Profit After Tax Profit Before Tax 182 225 ‘13
185 232 KEY MESSAGES ‘14 229 277 ‘15 285 370 ‘16 301 369 ‘17 430,000
120,000 373 449 ‘18 STORAGE CAPACITY STORAGE CAPACITY PENGERANG INDEPENDENT 528 628 ‘19 TERMINALS LANGSA 552 653 ‘20 COMMISSIONED COMMISSIONED MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT
ADDITIONAL 648 747 TERMINALS MALAYSIA MALAYSIA D IALOG NET EARNINGSPERSHARE(sen) ‘11
3.3 ‘12 3.7 T 3 ‘13 4.0
‘14 m
m 4.4 3 ‘15 3 5.5 ‘16
M 5.7 ‘17 TURNAROUND
an 6.9 ‘18 PLANT
MALAYSIA 9.1 - ‘19 hours 9.5 2 MILLION ‘20 11.2 EPC PROJECTIN TANK TERMINAL AUSTRALIA AUSTRALIA 1 EQUITY (%) & RETURNONSHAREHOLDERS’ SHAREHOLDERS’ EQUITY (RM’ million) ‘11 583 29 Equity Return onShareholders’ st
1,194 20 SUSTAINABILITY REPORT
1,352 15 1,560 15 1,980 16 2,415 13 WATER INTAKE PIPE CONTRACTOR FOR 3,111 13 LARGE COOLING MASTER SERVICE Equity Shareholders’ TURNAROUND
TIER 1 3,501 15 AGREEMENT PETRONAS ‘19‘18‘17‘16‘15‘14‘13‘12
COMPLETED 3,791 15 INDONESIA MALAYSIA ‘20 4,132 16 EVENT &HIGHLIGHTS
NET ASSETS PERSHARE(sen) ‘11 13 25 28
FLOATING ROOF TANK 32 LARGEST EXTERNAL WITH TOTAL THROUGHPUT OF 1,091 PENGERANG MARINE 40 VESSEL CALLS HIGHEST 30 MILLIONMT 47 OPERATIONS SECURED SINGAPORE MALAYSIA
58 CORPORATE GOVERNANCE 62 ‘19‘18‘17‘16‘15‘14‘13‘12 67 ‘20 73 shares. ordinary twenty-five and hundred one every for FY2014 for was special share dividend of one treasury share payment dividend the in Included DIVIDEND PAYMENT (RM’ million) ‘11 61 300
RECLAMATION 74 DEEPWATER TERMINALS PHASE 3,PENGERANG 80
COMPLETED 102 LAND MALAYSIA
113 ADDITIONAL INFORMATION
ACRES 117 149 180 ‘19‘18‘17‘16‘15‘14‘13‘12
214 ‘20 175 11 DIALOG GROUP BERHAD Annual Report 2020 12 DIALOG GROUP BERHAD Annual Report 2020 hlegs ruh o b te admc During pandemic. towards million the RM3.3 contributed by DIALOG FY2020, on brought previously challenges ways ongoing in the overcome to communities, our supporting and in life part our do to committed is of DIALOG unimaginable. walks everyone, all impacted across has pandemic COVID-19 The HIGHLIGHTS COVID-19 COMMUNITY SUPPORT Movement ControlOrder ("MCO") CashlessFood RM3.3 million Community Support 1,009 Families RM220,000 Aid Programme Activities &Initiatives Contributed COVID-19 OVERVIEW TM KEY MESSAGES Machines ECG In-kind donationworthmorethan Hospital SungaiBuloh,KualaLumpur, Hospital EncheBesarHajjahKhalsomKluang. efforts tothoseaffected bythispandemic. relief support and assistance, provide to part our do to continue will we evolve, to continues situation the As and lowincomecommunitiesacrossthecountry. liners front for efforts, relief and assistance COVID-19 Pusat PerubatanUniversitiMalaya("PPUM"), Hospital Tengku Ampuan Afzan Pahang, Hospital Sultanah Aminah JohorBahru, Thermometers RM700,000 MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT Infrared Syringe Pumps (5,000 pieces) PPE
Workers SupportFund COVID-19 HealthCare 3,000 families NGOs &Partners 100 schools 1,000,000 & EquipmentFund RM1 million Governments MyKasih Masks distributedto: PDRM State SUSTAINABILITY REPORT More than More than Government Employees Hospitals D Offices IALOG
EVENT &HIGHLIGHTS RM500,000 Bencana Johor Tabung CORPORATE GOVERNANCE ADDITIONAL INFORMATION 13 DIALOG GROUP BERHAD Annual Report 2020 OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
EXECUTIVE CHAIRMAN'S STATEMENT
‘‘Dear Valued Shareholders, ROE total SHAREHOLDER On behalf of the EQUITY Board of Directors, 15.9% I am pleased to present RM the Annual Report for 4.13B 14 15 Dialog Group Berhad (“DIALOG” or “the OUR PERFORMANCE
Group”) for the I am pleased to report that DIALOG delivered yet another Group has proactively taken precautionary measures to
commendable result for the financial year ended 30 June preserve our cash flow, financial strength and stability. financial year ended ‘‘ 2020. Net operating profit after tax including joint ventures These include enhanced credit risk monitoring controls, 30 June 2020 (“FY2020”). and associates grew by 12.2% to RM619.6 million from reprioritisation of capital and operational expenditures, RM552.3 million. During the financial year, the Group booked ongoing cost management initiatives, and also a salary a RM28.5 million non-cash fair value gain from the acquisition reduction exercise for senior and middle management. of Halliburton Bayan Petroleum Sdn. Bhd. (“HBP”), which resulted in HBP becoming a subsidiary company with effect Given the continued need to exercise financial prudence in from August 2019. With this, the Group’s total net profit after the wake of the prevailing economic uncertainties brought tax for the financial year ended 30 June 2020 was RM648.1 on by the COVID-19 pandemic, the Board recommends a million. lower final cash dividend of 1.90 sen (FY2019: 2.30 sen) per ordinary share for FY2020. Including the interim dividend of The strong and resilient performance achieved in the current 1.20 sen per ordinary share paid in June 2020, this brings the financial year was mainly contributed by our Malaysian total dividend for FY2020 to 3.10 sen (FY2019: 3.80 sen) per operations which saw higher contributions from the Group’s ordinary share. terminals business especially from our DIALOG Terminals Langsat facility and Pengerang Independent Terminals Sdn. On 11 September 2020, the Group also lodged its inaugural Bhd. (“PITSB”). Islamic notes issuance programme of up to an aggregate of RM3.0 billion in nominal value based on the Shariah principle Annual Report 2020 BERHAD DIALOG GROUP In tandem with the above, the Group’s balance sheet has of Wakalah Bi Al-Istithmar (“Sukuk Programme”) with the Annual Report 2020 BERHAD DIALOG GROUP also continued to strengthen with total assets expanding by Securities Commission Malaysia (”SC”). The purpose of this 7.2% to RM7.19 billion from RM6.71 billion a year ago. Total programme is to increase the financing and balance sheet shareholders’ equity as at 30 June 2020 stood at RM4.13 management flexibility for the Group. billion, and return on shareholders’ equity for FY2020 was 15.9%. The collective measures above are to ensure that DIALOG remains resilient, and is able to weather the prolonged Overall, the Group’s performance for FY2020 has not been uncertainties that lie ahead, whilst preserving the value that materially affected by COVID-19. The Group’s business has been created over the years for all stakeholders. The has mostly been categorised as essential in the respective Board appreciates the understanding, support and trust of our countries where it operates, and has thus continued to operate shareholders, as we remain committed to creating sustainable throughout this pandemic at various capacities in compliance value for all of our stakeholders. TAN SRI DR NGAU BOON KEAT with various local health requirements. Nonetheless, the Executive Chairman
F I H S M N D R T S TECH OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
EXECUTIVE CHAIRMAN’S STATEMENT
16 17
Pengerang Deepwater Terminals (Northern View)
OUR PROSPECTS • Growing long-term recurring income across all sectors; Phase 3 of PDT has been designated for the development gas & petrochemical players who are looking to capture Asia • Active recruitment, development and retention of talent; of more dedicated petroleum and petrochemical storage Pacific demand growth over the next 30 years. The economic disruption and demand destruction brought terminals for medium to long term customers, potentially Annual Report 2020 BERHAD DIALOG GROUP • Cultivating strong relationships with stakeholders including Annual Report 2020 BERHAD DIALOG GROUP about by the COVID-19 pandemic is unlike any other crisis comprising oil traders, multinational oil companies, refineries During FY2020 we commenced full operations for an customers, suppliers, partners, bankers, regulators and 3 before. In remains unclear how long this will last, as ongoing and petrochemical plants. This will support the further additional 430,000 m of storage capacity in Phase 1E government authorities; and geopolitical tensions continue to add to global economic development of various downstream operations including of Pengerang Independent Terminals Sdn. Bhd., and 3 uncertainties as well. Nevertheless, according to the • Development of proprietary technology for use in our those of the refinery and petrochemical plants within the 120,000 m of storage capacity at our DIALOG Terminals International Energy Agency, global oil demand is forecasted businesses. Pengerang Integrated Petroleum Complex. Langsat facility (“DTL”). to rebound in 2021, of which Asia is estimated to account With our dedicated management team and the long-term In keeping with our growth aspirations for our terminals for 77% of oil demand growth through to 2025. Overall, the In line with the above, the Phase 3 land reclamation has business strategies above, we remain confident that our business, DIALOG is investing another RM100 million for economic environment is expected to remain extremely been completed, and the construction of a storage terminal, business is well structured to manage and sustain itself the addition of another 85,000 m3 of storage capacity to challenging in the short to medium term. common tankage facilities (including shared infrastructure) through periods of economic uncertainty, oil price volatility and deepwater marine facilities (“Jetty 3”) for the Long Term store clean petroleum products at our DTL facility, that will In view of the above, DIALOG will remain focused and and currency movements. Storage Agreement with BP Singapore Pte. Limited remains be completed and ready for operations by the end of 2021. steadfast in the pursuit of the following key long term on track to commence commercial operations in mid-2021. With 17 acres (6.87ha) of land still available, approximately Looking forward in the midstream sector, the ongoing 3 strategies, which have helped the Group weather different another 200,000 m of storage capacity can be added to DTL development of Pengerang Deepwater Terminals (“PDT”) economic cycles in the past: With approximately another 500 acres available for over the longer term, thus bringing the total capacity at the into the largest petroleum and petrochemical hub for the Asia development, PDT’s perfect location and one-stop integrated DTL facility to over 1.0 million m3. • Diversification across the upstream, midstream and Pacific region, will continue to take centre stage. downstream sectors of the oil, gas & petrochemical hub offering provides a compelling value proposition to oil, industries; OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
EXECUTIVE CHAIRMAN’S STATEMENT
Today, we are the 2nd largest terminal owner cum operator in the region with a current operating capacity of 4.6 million m3. We will continue to invest in phased capacity expansions for dedicated long term customers across our midstream terminals business portfolio, in line with the Group’s longer term strategy to grow its sustainable and recurring income.
In the downstream sector, we will continue to leverage on our strengths and established track record in integrated technical 18 services comprising Engineering, Procurement, Construction 19 & Commissioning (“EPCC”), Plant Maintenance & Catalyst Handling Services, and Specialist Products & Services. With the completion of PDT Phase 2 and the refinery projects at RAPID, we are also now actively involved in the plant maintenance services for these projects, in addition to other existing projects. Bayan Complex DIALOG Terminals Langsat While activities are expected to be slower in FY2021, we will continue to build and strengthen our competencies by investing and multi-skilling our workforce to ensure we remain During FY2020, the Group acquired an additional 45% equity SUSTAINABILITY Acknowledgements efficient and competitive. Alongside the investment in our interest in Halliburton Bayan Petroleum Sdn. Bhd. (“HBP”) people is also our investment in technology. DIALOG has from our joint venture partners, Halliburton International, Inc. The Board and Management recognises that the sustainability On behalf of the Board of Directors, I am pleased to welcome long leveraged on technology to differentiate ourselves from This resulted in HBP becoming a subsidiary with effect from of the Group’s performance can only be possible with a our new Non-Executive Directors, Encik Mohamad Hafiz bin our competitors. In this regard, we intend to accelerate our August 2019. strong foundation that promotes accountability, transparency, Kassim (representing the Employees Provident Fund Board) technology initiatives to reinforce our competitiveness. integrity and ethical behaviour at all times. Hence, the Board and Puan Juniwati Rahmat Hussin. DIALOG will definitely Looking beyond the current low oil price environment and and Management will continue its long-standing commitment benefit from their vast experience in investment management, Moving on to upstream, following the drop in oil prices and given the Group’s long term business focus, this was the in upholding these principles through the implementation of and petroleum and petrochemical operations. production cuts by oil producers, the Group will continue to right opportunity for us to expand and deepen our upstream good corporate governance practices as advocated by the proactively manage the cash flow of our upstream assets investments, in line with our diversified business model Malaysian Code on Corporate Governance ("MCCG"). We would also like to extend our sincere thanks to Tunku together with our respective partners accordingly. strategy. Increased upstream activities also provide added Alizakri bin Raja Muhammad Alias for his contributions during opportunities for us to participate in other parts of the value The Group also recognises the serious threat that corruption his tenure on our Board, and also to Mr. Chew Eng Kar for his chain in the field redevelopment cycle, particularly in the poses to corporates and the economy. Accordingly, we have 21 years of service to the Board. Annual Report 2020 BERHAD DIALOG GROUP provision of engineering and specialist technical services. introduced and implemented an Anti-Bribery & Corruption Annual Report 2020 BERHAD DIALOG GROUP Policy during the year to prevent corrupt practices, and provide The Board of Directors and I would like to thank all our Moving forward, we will continue to build our knowledge greater accountability and transparency to our stakeholders. esteemed customers, principals as well as technology and and experience in the upstream sector, and actively look for business partners and their associates, for their continuous opportunities to increase our development and production Combined with a clear focus on our core values of support to the Group. I would also like to thank our services and assets. Integrity, Health, Safety & Environment (“HSE”), Quality, shareholders for their unwavering support and confidence in Competency and Excellence, the Group remains steadfast the Group. Barring any unforeseen circumstances, the Group is optimistic in creating value for all our stakeholders and positively that its performance will remain positive for the financial year impacting the communities in which we operate. Further I am fortunate to have on the Board a group of exceptional ending 30 June 2021. details on our sustainability journey are in the enclosed individuals. To all our Board members, I wish to express my Sustainability Report. sincere appreciation for your invaluable insights and counsel, which has seen the Group grow from strength to strength over the years. Last but not least, I thank the Management and the Sustainability Report: pages 64 to 92 entire DIALOG family for their dedication and commitment to the Group.
Tan Sri Dr Ngau Boon Keat Executive Chairman 20 DIALOG GROUP BERHAD Annual Report 2020 Mohamad Hafiz BinKassim Dato’ Ismail BinKarim,KamariyahBinti Hamdan,JuniwatiRahmat Hussin Back Row Chan Yew Kai,SitiKhaironBintiShariff Zainab BintiMohdSalleh,Datuk OhChongPeng, Tan SriDrNgauBoonKeat, Front Row LEFT TO RIGHT: BOARD OFDIRECTORS OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT BOARD OFDIRECTORS' PROFILE T of DIALOG. shareholder major a deemed is Keat Boon Ngau Dr TanSri and gas oil, the in petrochemical industry. experience working of years 48 than from positions more has He various Manager. Engineering to held Engineer Production he Engineer where Refinery 1980 PETRONAS to at a 1975 worked from as He Ltd. 1972 Pte Singapore in Mobil with career his began He Engineer withtheBoardofEngineersMalaysia. Professional Registered a also is He Singapore. Engineers, of Institution the and Malaysia Engineers, of Institution the of Mechanical in member a is He Zealand. Canterbury,New of University the (Hons.) Degree Bachelor's from Engineering in Doctorate Honorary an and Engineering a holds the He of member Council since a 2014. Council Development Region and Economic Coast Corporation 2012 East Development since Board Petroleum a Berhad International Johor is of of He Professionals. member Director Exhibition and & Conference Foundation MyKasih of Trustee and Founder Pengerang the Bhd., of TerminalsSdn. Independent Chairman the is He Committee. ESOS and Committee Remuneration the Chairman of Executive Chairman and the DIALOG of currently is on and Board 1990 DIALOG January the 2 to appointed was He 1984. since Group the with been has and DIALOG of shareholder major an S SUSTAINABILITY REPORT ri D r N gau B oon K eat Remuneration Committee Board Number ofMeetings Attended Malaysian/Aged 72 Executive Chairman NGAU BOONKEAT TAN SRIDR
s h c-one and co-founder the is EVENT &HIGHLIGHTS
1/1 7/7
rjc egneig n mngmn, aktn and marketing and PETRONASfor5years. management, years 9 for ICI with formerly was He development. and business operations, engineering plant and gas project encompassing oil, the industry in experience of petrochemical years 42 over has He Johor of member board Petroleum DevelopmentCorporationBerhad. alternate an also currently position. is hiscurrent He to prior Chief DIALOG & of Officer President Operating and Director Managing Group Deputy as appointed later was He Retail. Petroleum and Services TechnicalMarketing, Development, Business operations Group’s the of the overseeing Ltd, Pte of (Asia) Officer Systems Dialog Executive Chief and Director as was promoted and later Manager General as 1993 in DIALOG joined He United Kingdom. Engineers, Chemical of Institution the of Fellow a also is He Malaysia. Engineers of Board inChemical the with registered Engineer Degree Honours of the Institution of Engineers, Malaysia and is a Professional class member a is He Malaya. first of University the from Engineering a holds He Chairman ofDIALOG. Deputy Executive the currently is and 2005 September 23 C han CORPORATE GOVERNANCE Y ew K ai was pone t DAO Bad on Board DIALOG to appointed Malaysian/Aged 66 Executive DeputyChairman KAI CHAN YEW Board Number ofMeetings
ADDITIONAL INFORMATION Attended 7/7
21 DIALOG GROUP BERHAD Annual Report 2020 22 DIALOG GROUP BERHAD Annual Report 2020 the UTAR EducationFoundation. of trustee (“UTAR”)Tunkua Universiti Rahman and of Abdul and Saujana Resort (M) Berhad. He is also a Council Member Berhad PUC WCE Berhad, Mills Flour include Malayan Berhad, Holdings companies public other in directorships His Chairman the Services and Financial Offshore (1996-2020) Authority. Labuan the member of a (2018-2020) was He (2003-2009). Board Standards Accounting Malaysian the of member a also MICPAwas the and of (1981-2002) Member Council (1994-1996), President past a also and (1990-1996) Exchange Stock Lumpur Kuala the of Member Committee a as PricewaterhouseCoopers), Malaysia (1974-1997). He was known (now Lybrand & Coopers of partner senior a was He Accountants andtheMalaysianInstituteof Accountants. is also a member of the Malaysian Institute of Certified Public Institute of Chartered Accountants in England and Wales. He Charteredqualified a is He the of Fellow a is and Accountant Audit (email: [email protected]). Director Non-Executive the Independent Senior the also of is He Nomination Chairman Committee, Committee. Remuneration the the of member on a and Committee Management is Risk DIALOG He Committee, 2009. of January Director 9 Non-Executive Independent D BOARD OFDIRECTORS' PROFILE atuk O h C hong P eng OVERVIEW was Remuneration Committee Nomination Committee Risk ManagementCommittee Audit Committee Board Number ofMeetings Attended Malaysian/Aged 76 Non-Executive Director Independent OH CHONGPENG DATUK
pone a an as appointed
KEY MESSAGES
1/1 2/2 3/3 6/6 7/7
Independent rvtsto, niern, rcrmn ad construction and ventures, contracts, technologytransfersetc. gas, procurement joint and engineering, transactions, property oil privatisation, banking, personal to finance, and relation corporate real advisory, in corporate matters general legal various in of experience working aspects of years 35 over has She and gasbusiness. oil the in involved actively be to continued she where 2005 to 1989 from Partners & Mah-Kamariyah of Partner a be to Bhd. Sdn. Gas PETRONAS (now PETRONAS Gas Berhad) in 1988. She left to PETRONAS pioneer Secretary Advisor Legal its Company as of was and posting one last her as and advisors 1979 legal in PETRONAS joined She Honourable SocietyofLincoln’s Inn. University of London, and a Barrister-at-Law degree from the the from degree Laws of Master a and Bachelor a holds She Committee, Nomination Committee, Remuneration CommitteeandESOSCommittee. Committee, Management Audit the of member Risk a is She 2010. July 27 K amariyah B o-xctv Drco o DAO on DIALOG of Director Non-Executive MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT inti H amdan a apitd s an as appointed was Remuneration Committee Nomination Committee Risk ManagementCommittee Audit Committee Number ofMeetings Malaysian/Aged 69 Non-Executive Director Independent BINTI HAMDAN KAMARIYAH Board
Attended
1/1 2/2 3/3 6/6 7/7
She iscurrentlyalsoa Trustee ofMyKasihFoundation. EPF. joining to prior years 16 for Malaysia at Putra lecturer University a was She 2008. until years 12 for EPF served Degree (Econs) having after Manager,Department General Investment Fund the Arts as EPF from retired of She Philippines. of University Master from and Malaya from Degree University (Hons.) Economics of Bachelor a holds She Committee, of DIALOG. shareholder substantial a is Audit Provident which (“EPF”), Employees Board Fund of representative the appointed the as 2010 and 2005 of between Board DIALOG the on Committee, previously member was She Nomination Committee. ESOS and Committee Committee, Remuneration a Management Risk is She Board on1 April 2013. S Independent iti K SUSTAINABILITY REPORT hairon o-xctv Drco o te DIALOG the of Director Non-Executive B inti S hariff a apitd s an as appointed was Remuneration Committee Nomination Committee Risk ManagementCommittee Audit Committee Board Number ofMeetings Attended Malaysian/Aged 66 Non-Executive Director Independent BINTI SHARIFF SITI KHAIRON EVENT &HIGHLIGHTS
1/1 2/2 3/3 6/6 7/7
soito ad raue o Fobl Ascain of Association Football of Malaysia. Treasurer and Association Berhad Football State Johor the of President also is He Foundation. Globe Paragon of Zarith Sofia Foundation State of Johor and director Johor Darul Ta’zim a and a Trustee is of Tunku Laksamana Johor Cancer Foundation, Ismail Dato’ Bahru Johor of Mayor as in 2013andJohorStateSecretary2014. promoted later in was Tinggi Kota and of 2009 Officer District the became Ismail 2006. Dato’ in Council Municipal Kulai of of (Head) role DiPertua Yang the on taking before Department Religious Islamic State Johor and Office Secretary State Johor Office, District Bahru Johor Unit, Planning Economic City State Johor Bahru Council, Johor Office, takeupsenior District to Segamat on the in went positions He 1992. until Johor in offices land the in positions Office several to Land promoted was Bahru and 1982 Johor in the at Collector Assistant Revenue an as Land career his started He Service. Civil Johor the in tenure 2016. his during in positions Secretary various held State Ismail Dato’ Johor as retirement his to prior years 35 over for Service Civil Johor the served Dato’Ismail a of and Honours Diploma inEducationfromUniversitiKebangsaanMalaysia. with member (History) Arts of Bachelor a a holds He is He DIALOG 2017. the November the Audit CommitteeandRiskManagementCommittee. 24 of on Director Board Non-Executive Independent D ato CORPORATE GOVERNANCE I ’ smail
B in K arim a apitd s an as appointed was Malaysian/Aged 65 Non-Executive Director Independent BIN KARIM DATO’ ISMAIL Board Number ofMeetings Attended Risk ManagementCommittee Audit Committee
ADDITIONAL INFORMATION
2/3 5/6 5/7
23 DIALOG GROUP BERHAD Annual Report 2020 24 DIALOG GROUP BERHAD Annual Report 2020 rvosy lent drco t Tnu lzki i Raja was Bin Alizakri and Tunku Bhd Muhammad Alias ontheDIALOGBoard. to Holdings director (M) alternate Brands previously Malaysia QSR PLUS of and director PwC a Berhad also Capital, is Daiwa He at Berhad. TM worked and he EPF, joining to Prior investment in experience years' 20 analysis, privateequityinvesting,accountingandauditing. than more has departments. Equity He Private and Markets Private Market, Capital the headed Hafiz Mohamad role, current his to Prior subsidiary ofEPF. global wholly-owned a is and which Bhd., Sdn. Land Kwasa of Director domestic Investment Managing the EPFs is he addition, In class. asset Estate the of portfolios the Real manages Estate The Real Department of Head Department. the is and Investment 2008 in EPF joined He a CFA Charterholder. and Accountant Certified Chartered the of Fellow a is also He from Science. Finance Political and and Economics of Accounting School London (Econs) B.Sc a holds He substantial a is which (“EPF”), shareholder ofDIALOG. Board Fund Provident Employees the representing 2019, November 14 on Board M Non-Independent BOARD OFDIRECTORS' PROFILE ohamad H afiz o-xctv Drco o te DIALOG the of Director Non-Executive B in K assim OVERVIEW Board Number ofMeetings Attended Malaysian/Aged 45 Non-Executive Director Non-Independent BIN KASSIM MOHAMAD HAFIZ a apitd as appointed was
KEY MESSAGES 2/2
f eaa ainl ehd n a ebr f Advisory of member a Council for Yayasan and PenerajuPendidikanBumiputera. Berhad Nasional Tenaga of She is currently also an Independent Non-Executive Director Philharmonic Malaysian the of Orchestra. CEO and Filharmonik Dewan of PETRONAS CEO of position the Business held also She & Trading. & Marketing and Planning Resource Human Development, Corporate Operations, Management, Refinery Project Petroleum in experience Operations, hands-on of Laboratory range wide career, a her gained Vice has Throughout she and Division. Management Education of Resource President Human of Vice Complex, President Integrated Pengerang of & Director President PETRONAS Venture Vice the the including positions Chemist, in several in a served Group as and 1981 Research, in of career PETRONAS years her 35 started after She 2016 service. in PETRONAS from retired She from UniversityofKent,Canterbury, UnitedKingdom. She holds a Bachelor of Science (Hons) Degree in Chemistry on DIALOG and RiskManagementCommittee. Committee of Audit the of member a is She Director 2020. August 19 Non-Executive Independent J uniwati R ahmat MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT
H ussin a apitd s an as appointed was Number ofMeetings h ws pone i August 2020. in appointed as was FY2020 she for disclosure No Malaysian/Aged 61 Non-Executive Director Independent HUSSIN JUNIWATI RAHMAT
Attended
Financial . any 4. any 3. 2. 1 Other thandisclosed,noneoftheDirectors andKeySeniorManagementhave: management. for financialandcostmanagementaccounting. financial as known responsible and companies other and (now PricewaterhouseCoopers) Waterhouse Price with auditing formerly was She working in of years 32 experience over was has and She Joint Secretary. Accountant and Company Officer as Financial Chief Group 1995 to promoted in later DIALOG joined She Accountant withtheMalaysianInstituteof Accountants. from Accountancy Chartered Wales,a South is New and of Australia University in Commerce of Bachelor a holds She Remuneration the of on Secretary Committee. the Board is DIALOG She 2007. the May to 15 appointed was She DIALOG. Z PROFILE BOARD OFDIRECTORS'
ainab any any familyrelationshipwithdirector and/ormajorshareholderofDIALOG; SUSTAINABILITY REPORT
conflict public conviction B Officer and Joint Company Secretary of Secretary Company Joint and Officer inti sanction
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during e s lo urnl a atrae or mme of member board and alternate Professionals a CouncilMemberoftheMalaysianGas Association. Exhibition an & currently Conference International services. also specialised is and He maintenance and fabrication, and construction gas consultancy, and design oil in companies other related with and years 5 for Bhd. Sdn. Carigali and PETRONAS gas with formerly oil, was the more He in industry. petrochemical has experience working He of years USA. 33 University,than Engineering Nevada-Reno Mechanical the Malaysia in from a Degree holds for Science He of 2009. Director Bachelor November 1 Managing on Operations Group Business subsequently was to He Bhd.and Bhd.. promoted Sdn. Sdn. &C Services E Business Plant Director,Dialog Dialog of as Officer the Executive later 2001 was Chief and in Division) Services Group (Plant Development the 2014. joined 10October on He DIALOG of Officer Operating Chief M PROFILE MANAGEMENT’S KEY SENIOR ustaffa
and CORPORATE GOVERNANCE the financial
K amal year.
B in A bu B Malaysian/Aged 56 Chief OperatingOfficer BAKAR BIN ABU MUSTAFFA KAMAL akar ADDITIONAL INFORMATION a appointed was
25 DIALOG GROUP BERHAD Annual Report 2020 26 DIALOG GROUP BERHAD Annual Report 2020 industry. petrochemical and gas oil, construction the the in engineering, management project in and and experience 37 working over dredging, of has He years jetties. reclamation, and tanks storage of land construction involves project which Pengerang the of development the for responsible also is He Kingdom. United of Birmingham, University Aston, the from Engineering Civil in Degree Science of Bachelor a Director, Additionally, holds He Projects. units. Major of Director Managing the also Managing is he business three manages the and where leads (“ECM”) he is Maintenance & Construction WOOI Engineering, CHONG CHONG United Accountants, Certified the Kingdom. with Chartered qualified of professionally Association is and Accountants, Institute Malaysian of the with Accountant Chartered a is He his with extensive experience in Corporate corporate and financial management. Group lead to continues He 2019. until years 21 in for Board DIALOG Board the served since DIALOG has He 1998. the to appointment his before Finance Group of Manager General to promoted was and Manager He Corporate. C MALAYSIA MANAGEMENT’S PROFILE hew E ng K ar ond ILG n 92 s ru Finance Group as 1992 in DIALOG joined s h Sno Mngn Drco, Group Director, Managing Senior the is OVERVIEW Malaysian, 61 Malaysian, 62 Managing Director, MajorProjects Construction &Maintenance Managing Director, Engineering, CHONG WOOI Group Corporate Senior ManagingDirector, CHEW ENGKAR KEY MESSAGES
eeomn, prtos aaeet n strategy President &CEOofPETRONAS Exploration. formerly Vice the was was position held he last and his where DIALOG, PETRONAS with joining to management Prior development. operations business management, development, exploration of including years functions 41 of range over wide a across experience has industry gas and oil Effendy global Board Malaysia. the with Geologists geologist of professional registered a is He Malaya. of University the class from Geology first in a Degree Honours holds He Gas. and Oil Upstream Director, as E Pittsburgh, Pennsylvania. DecisionSystems and Information in Finance BSc a and & Canterbury of Accounting University the in from Wei Commerce Wu of Bachelor management. a holds ventures joint and development, business technology, information group planning, corporate serving covering positions management senior Consulting/ various consultant 2007, held has in he DIALOG technology KPMG joining Since clients. and Services with worked Financial management he where Manager a York New as a in DIALOG, based Inc. joining was BearingPoint to Wei Prior 2018. Wu November in Strategy N ffendy gau Malaysian, 43 Corporate Strategy Director, NGAU WUWEI Malaysian, 68 Upstream OilandGas Director, A E ffendy bdullah
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a apitd s ietr Corporate Director, as appointed was bin BIN A BIN
from bdullah Carnegie joined Mellon DIALOG in 2018 in DIALOG University
niern ad optn fo Mns University, Monash gas andpetrochemicalindustry. oil, the from in experience working of years 23 has Computing He Australia. and Electrical, in Engineering Degree Bachelor’s a holds He Construction. and Engineering of Head Deputy and Manager Engineering Design Deputy Projects, Major – Director Deputy Services, include ("E&C") Construction and Engineering Group of Head Acting appointments Previous business and Manager. Electrical for an Instrumentation the as units 2007 in oversees business DIALOG joined various He and DIALOG. the leads of activities He development 2020. June in Services & Products Specialist and Development Business B the of Fellow a the QA/QC. of working experienceintheoilandgasindustry. years is 40 from has and Group UK He Engineers, Engineering Chemical of UK. Institution Chemical and Birmingham, in of HSE, BSc University a Group holds Audit, John and Internal improvement & Management drive Risk Group Excellence, Operations to oversees continues in and growth sustainable drive to programmes he transformation Excellence 2020, Business Director,July the Being Managing Department. heading Audit appointed Internal also and Excellence, Management Risk Operations appointed Director, subsequently was as and Downstream Director, J ohn r yan SUSTAINABILITY REPORT H
T enry an
a apitd xctv Drco o Group of Director Executive appointed was T hornt on
ond ILG n 05 as 2015 in DIALOG joined Malaysian, 44 British, 62 Specialist Products&Services Executive Director, Group BusinessDevelopment Executive Director, B Business Excellence Managing Director, J ohn ryan H T enry EVENT &HIGHLIGHTS an T hornt on
P petrochemical and gas of oil, years the industry. 28 in has experience He working Campus). of (Malaysia University and London the USA from East Operations Connecticut, Logistics Management in Hartford, Diploma of Business a a University in holds the (Hons) He from Science 2010. April of in Bachelor joined Bhd. He Sdn. 2018. Terminals July Dialog in Business Terminals of Manager A N pat. ro t jiig ILG h ws the was he DIALOG, joining and technical facilities to Upstream Prior CEO ofMalaysiaLNG. of the plants. in senior provision LNG solutions and including and technical services on roles took management he where PETRONAS with primarily sector, gas and oil the in experience working of years 30 than more has He Engineers. of Board the registered with Engineer Professional of a University is and and the UK Nottingham, from Engineering Planning BSc Mechanical a in holds Corporate (Hons) He Services. both Construction and for Engineering Director Executive au hmad Malaysian, 58 Malaysian, 52 Services Engineering andConstruction Executive Director, Corporate Planning Executive Director, PAU KIEWHUAI Terminals Business Senior GeneralManager, AHMAD BIN ABDUL TALIP
CORPORATE GOVERNANCE K
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A H bdul uai
T ond ILG n 09 s the as 2019 in DIALOG joined alip was appointed Senior General General Senior appointed ADDITIONAL INFORMATION MALAYSIA
27 DIALOG GROUP BERHAD Annual Report 2020 28 DIALOG GROUP BERHAD Annual Report 2020 oal. ro t jiig ILG h ws ih S B and BV Optimal, Kertih. ESB and with was he internationally DIALOG, joining to both Prior maintenance, locally. operations, fabrication, and including commissioning functions various working in years’ 26 industry,working offshore and plant power turbine gas cycle over has refinery, combined petrochemical, gas, oil, the in experience He Malaysia. Universiti from Teknologi Engineering Mechanical in Diploma a 2015. and Masters anExecutive April Heholds University from e Management Asia Manager Business Engineering in Melaka. Maintenance in in a refinery as a Fabrication 2008 for in DIALOG and joined He Maintenance Plant S plant facilities. LNG and plants butanol plants, ethylene/polyethylene plants, processing gas refineries, oil of construction and engineering and gas, power generation facilities. He has actively participated in the and oil for design and engineering in experience Oil the working heading of years 33 than more has He Department. Gas a and firm consultant was engineering he an DIALOG, in of joining partner Board to the Prior with Malaysia. and registered Engineers Engineer Malaya Professional of a in University is Degree from Engineering of Engineering L Bachelor Mechanical a holds He 2007. in DIALOG joined He 2015. December in Projects Construction T MALAYSIA MANAGEMENT’S PROFILE an hahimi L ip
B eong in Z a apitd ed f niern and Engineering of Head appointed was akaria
a apitd ietr of Director appointed was OVERVIEW Malaysian, 50 Fabrication Plant Maintenanceand Director, SHAHIMI BINZAKARIA Malaysian, 57 Construction Projects Head, Engineeringand T an L ip L eong
KEY MESSAGES
S aae o te ak emnl iiin t IC Berhad MISC at General Division for 2years. Terminal the Tank was the he of DIALOG, Manager joining to Shell Prior senior with various positions. held years he where 20 Bhd. Sdn. about Trading leading Malaysia and a institution with years banking 3 local working than of more years and including 32 Business than experience, Arkansas more has in He of USA. State University, Degree Mississippi University from Administration Bachelor’s Business of the Masters a from holds Administration He in 2012. DIALOG joined He 2016. July in Relations Government 6 yearsand3respectivelyinSingapore. for Root & Brown and Group Sembawang the with formerly specialist was He industry. petrochemical and and gas oil, the management in services project Handling in design, experience Catalyst working of engineering years & 32 over Maintenance has and He Services. Plant development business of the operations oversees and leads He Malaysia. Engineers of Board the with registered Engineer Professional a is and Singapore of Engineering University National Structural from and Civil in Degree Engineering of Bachelor a holds He 2002. in DIALOG joined He 2015. July H hahruddin eng Malaysian, 56 Head, GovernmentRelations S Malaysian, 57 Head, PlantServices H hahruddin eng S S oon oon L L B B MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT ip ip in
in was appointed Head of Plant Services in Services Plant of Head appointed was A A hmad hmad a apitd ed of Head appointed was
0 er wt Hliutn hr se ed h rl of role the Central held to and Asia respectively. Pacific she Asia close for Manager where HR spent Senior Halliburton Regional she with years DIALOG, professional 10 Before and sector. consultancy services manufacturing, the companies multinational within several in experience 37years working over of has She effectiveness. cost and learning efficiency, organisational productivity, and staff promote development, that programmes leadership pipelining, talent HR includes which functions andmanages HR all overseeing plans, She leads strategic Coach. Associate ICF-ACSTH Certified an is and Management Personnel in Diploma J Resources. diversified activities, listed on the Main Market ofBursa Main Market the Malaysia. Shehasover27years ofworkingexperience. on listed activities, other with diversified provider service gas of and oil Head an for was Legal Group she DIALOG, and Before corporate work. on law commercial focusing Solicitor, and Advocate an as then practised She education. legal for office counselling a managed and academician an as line education legal the in career her Laws commenced She examinations. of Bar completed English and the Bachelor C UK London, her of University obtained the from Degree She 2012. in DIALOG J essie enny SUSTAINABILITY REPORT
K hok u s h Eeuie ietr f ru Human Group of Director Executive the is h jie DAO i 20. h hls a holds She 2007. in DIALOG joined She s h Ha o Gop ea. h joined She Legal. Group of Head the is Malaysian, 62 Group HumanResources Executive Director, J Malaysian, 53 Head, GroupLegal J essie enny C K EVENT &HIGHLIGHTS hok u
ro t jiig ILG Se a wrig n KPMG in working was Sue DIALOG, Malaysia, intheareasofauditandcorporatefinance. joining to Prior management. financial corporate of working areas the in years experience 18 than more with Accountants, of Malaysian Institute the of member a Associate and an CPAAustralia of is Member She Australia. in Systems University and Monash Management from Information of Masters a and Melbourne of University the from Commerce of Bachelor a March 2020. She joined DIALOG in October 2007. Sue holds S J ih ia nentoa a Cuty aae fr Malaysia, for Manager Brunei andGuamrunning hisownconsultingpractice. Country as International Malaysia Visa with HSBC years 4 with Business, Card of Head was years posting last his where 29 includes experience London. Bankers, His of Institute the from Studies Banking Diploma in a holds oversees objectives Jeffrey Foundation. responsibility and MyKasih the social through programs DIALOG’s Social in CSR of creation Chairman for Corporate the direction the DIALOG the assists setting He of appointed (MyKasih). Chairman was Responsibility he Deputy 2020, July Ventures as In Innovation Companies. DIALOG of the Group of Director Managing effrey ue Malaysian, 42 Head, CorporateServices S Malaysian, 66 Responsibility (MyKasih) DIALOG CorporateSocial Deputy Chairman, JEFFREY GERARDPERERA ue N CORPORATE GOVERNANCE N gau gau
G was appointed as Head, Corporate Services in Services Corporate Head, as appointed was erard
P erera
ond ILG n 08 as 2008 in DIALOG joined ADDITIONAL INFORMATION MALAYSIA
29 DIALOG GROUP BERHAD Annual Report 2020 30 DIALOG GROUP BERHAD Annual Report 2020 DIALOG uies diitain n a ahlr ere in Degree of Bachelor Master a a and Corporate FinancefromtheUniversityofNorth Texas, USA. holds Administration Corporate Group She of Business Head of Communications. Acting and Corporate Director Technology Digital of Ventures, Petroleum, Digital Head include of Officer Retail Executive Chief appointments Chief Development, as previous of 2000 Her Head in Officer. DIALOG Planning joined respective their She in programs communities. distribution welfare NGOs drive foreign and to local both with works she Foundation. Additionally, MyKasih the through objectives responsibility DIALOG’ssocial implements and runs that team a leads She H MALAYSIA DIALOG Seven SeasOilShipManagement asPortCaptain. with was he DIALOG, joining to Prior management. maritime experience in sailing, port operations, transfer operations and of years 23 Maritime to Malaysia close Academy.the has He from Voyages) Trade Unlimited more or Competency 3000GT of of (Master Certificate 1 Class a holds He operations. Pengerang the Deepwater Terminalefficient and safe Marine ensure to Area within and vessels manage all to of movement are coordinate roles primary his where Operations, M CAPT. MANAGEMENT’S PROFILE o K am ohammad Y n 09 s h Ha o or egrn Marine Pengerang our of Head the as 2019 in oprt Sca Rsosblt (MyKasih). Responsibility Social Corporate ong E , M velyn ohsein s h Mngn Drco of Director Managing the is OVERVIEW Malaysian, 56 Responsibility (MyKasih) DIALOG CorporateSocial Managing Director, HO KAM YONG, EVELYN Malaysian, 43 Pengerang MarineOperations Head, MOHSEIN BINZAINOORDIN CAPT. MOHAMMAD B in Z ainoordin joined KEY MESSAGES
rdn Sn Bd, hl MS aasa d. Bhd., Sdn. Malaysia Sdn. Bhd.. MDS Resources & Petroleum Shell MMC and Bhd. Sdn. (M) Petrofield Bhd., Malaysia Sdn. Sun with Trading formerly joining was to Malaysia Shell Berhad, Shell Sarawak Company, he Prior Petroleum working industry. 2012, gas of in and years DIALOG oil 30 the over in has experience He South Adelaide. of University finance Australia, the from and Accountancy in of Bachelor Degree a accounting Arts holds He Division. the Upstream the of matters oversees who Manager, A ed f efrac Pann & aaeet under Management & the Planning was PETRONAS Refinery&Petrochemical Corporation. Performance she the DIALOG, of joining in Head to improvements Prior industry. organisational energy included and business implementation, responsibilities development project Her excellence, companies. operational national bothmulti-national operational and in the more Petrochemicals in Downstream working has of experience, field Yee the of Siew years from 19 Singapore. than Management) of System University Project & National in Industrial in (Major MSc a Engineering holds also and Malaysia erceias uies Se od a S (Hons), BSc a holds She 1 Business. Petrochemicals S st bdul oo Malaysian, 55 Upstream Senior FinanceManager, MOHD YUSOFF ABDUL RASHIDBIN Malaysian, 42 Petrochemicals Business Director, SIEW YEE SOO ls i Idsra Ceity rm nvrii Teknologi Universiti from Chemistry Industrial in Class S
R iew ashid Y ee MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT B ond ILG n 09 s Director, as 2019 in DIALOG joined in M ohd Y usoff is the Senior Finance Senior the is
V Managing Country ICT was Accenture role to last ofPETRONAS Director forMalaysia. his attached where was years he 26 for that, Chief Director Before the Bhd.. and and Sdn. Officer Officer Information Chief Executive Group PETRONAS digital Prior with the years 4 organisations. as and over spent and Redza technology DIALOG, years businesses to information 36 of over in transformation has experience Redza of UK. & Science (UMIST), of G Institute Technology Manchester of University the from (Hons) Computation in BSc a holds He IT. Group Director, R ERNS Bkr uhs n Dlit pir o joining to prior Deloitte DIALOG. and Hughes Baker PETRONAS, Petroleum, British with formerly was He management. risk gas and oil the years sector, in where he held senior positions in the field of audit and 20 predominantly of experience, over working University has of He the Australia. from Queensland, degree Southern Management. Finance) & Risk (Accounting and Audit Commerce of Bachelor a holds and Internal CPA(Australia) a is He Group of Head ijayasoorya edza SUSTAINABILITY REPORT
oh ond ILG n 09 s Executive as 2019 in DIALOG joined
ond ILG n coe 21 a the as 2019 October in DIALOG joined Malaysian, 44 and Internal Audit Group RiskManagement Head, A/L K.KRISHNA MURTHY VIJAYASOORYA Malaysian, 60 Group IT Executive Director, REDZA GOH EVENT &HIGHLIGHTS AASAINTERNATIONAL MALAYSIA
water treatmentplants,bothlocally andoverseas. waste and water plants, petrochemical facilities, offshore gas and oil and onshore of maintenance and commissioning years of multi-disciplinary working experience in construction, 43 than more has He Singapore. and Professional Malaysia in Registered Engineer a is and Singapore Engineers, Institution of the and Malaysia Engineers, of Institution the of member a is He Malaya. of University the from Engineering Mechanical in Honours 1995. with Degree in Bachelor’s a DIALOG holds He joined He 2016. February in Technical T Corporation PteLtdfor2years. LNG Singapore at Operations of Vice-President the was he DIALOG, joining to Prior positions. management senior and to 17 years with Vopak where he held a variety of operational close spent he which of terminals liquid bulk of management years of extensive experience in both operations and general 22 than more has He Singapore. of University National the and a Master of Science Degree in Industrial Engineering Engineering from Mechanical in Degree Engineering of Bachelor a holds He 2017. in DIALOG joined He TerminalsBusiness. T an eo Singaporean, 50 Terminals Business Chief ExecutiveOfficer, TEO SEOWLING Malaysian, 68 Technical Executive Director, TAN LEK L S CORPORATE GOVERNANCE eow ek L L ek ing a apitd xctv Drco - Director Executive appointed was is the Chief Executive Officer of the of Officer Executive Chief the ADDITIONAL INFORMATION 31 DIALOG GROUP BERHAD Annual Report 2020 32 DIALOG GROUP BERHAD Annual Report 2020 INTERNATIONAL nld LG VM n Btdee itiuin facilities, and tanksintheoil,gaspetrochemicalindustry. distribution Butadiene and including project management and shop fabrication of vessels VCM LPG, in experience include working of which facilities storage years petrochemical of design 50 engineering over Tokyo, has University, He Kogakuin Japan. from Engineering in Degree Chemical Bachelor’s a holds He Ltd. Pte Holdings OTEC of acquisition the through 2006 April since OTEC DIALOG Y K onn DAO, e a Gnrl aae o Business of to Manager Prior General Development forChiyodaSingapore(Pte)Limited. was planning. he corporate DIALOG, joining and mostheld tendering he spent marketing, where development, business of Corporation He areas the Chiyoda in positions Japan. numerous with career University, his Bunkyo of the DIALOG Studies) from of (International Arts of Bachelor Development a holds He OTEC. Business Manager, General MANAGEMENT’S PROFILE oshiyuki eisaku T H akahashi iraoka ond ILG n 00 s the as 2020 in DIALOG joined
s h Mngn Drco of Director Managing the is OVERVIEW Japanese, 75 DIALOG OTEC Managing Director, YOSHIYUKI HIRAOKA Japanese, 40 OTEC –BusinessDevelopment General Manager, KEISAKU TAKAHASHI KEY MESSAGES
o nue hy r dlvrd aey wt qaiy n in and quality with safely, delivered a timelymanner. are projects they various ensure on to Advisor as served with also tenure she her Chiyoda, During Limited. of (Pte) DIALOG, Division Singapore Engineering joining Chiyoda the to of Manager Prior General was as management. she growth project profit as and well revenue management, strategic her areas of the with in experience brings from work relevant of She MBA years 30 to USA. a close University, and State Singapore Oregon of the University from National Degree the (Chemical) Engineering of Bachelor a holds K General contract negotiationandglobalmarkets. management, inproject experience extensive has He field. the the in leader assisting international an as industry itself establish to technology company which automated of the years of 11 in experience, Bachelor were working of a years 25 holds over He has He Limited. Automation. and Engineering in TechnologyDegree Fitzroy acquisition the DIALOG through 2011 of April since Zealand New in R wek ichard Singaporean, 52 OTEC -Engineering General Manager, KWEK HONG New Zealander, 47 DIALOG Fitzroy Managing Director, RICHARD ELLIS H aae, niern o DAO OE. She OTEC. DIALOG of Engineering Manager, ong E llis H MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT is the Managing Director of DIALOG Fitzroy, ong ond ILG n 00 s the as 2020 in DIALOG joined
over 31 years of working experience in the fields of fields and the chain, in supply marketing ofspecialistproducts fortheoilandgassector. experience construction, working fabrication, of engineering, years 31 has He respectively.over India and the Oman within UAE, roles in Group various APL held to he Prior 2012, Engineering. in DIALOG Mechanical joining in Diploma a services. holds storage He and sales distribution of trading, consist the marketing, which and oversees region he the in where operations India, business and Asia Central MENA, V products andservices. specialist of marketing and sales the in experience working of years 22 has He Kingdom. United Marketing, of Institute Chartered the from Marketing in Diploma a and Singapore of Honours an University National the from Engineering holds Chemical in Degree He Thailand. for Manager Country and Singapore for Manager Marketing include appointments prior his where 2004 in DIALOG joined He 2015. since locations international other covering services and products specialty S for ijayasekharan teven igpr i Otbr 04 H i as rsosbe for responsible also is He 2014. October in Singapore SUSTAINABILITY REPORT T eow Y is N ee a apitd onr Manager Country appointed was h Rgoa Mngr for Manager Regional the Indian, 49 MENA, Central Asia andIndia Regional Manager, VIJAYASEKHARAN N Singaporean, 46 Singapore Country Manager, S teven T EVENT &HIGHLIGHTS eow Y ee
A ILG ae lo nldd rcrmn Manager, Procurement included also Proposal Managerand Acting HeadofContracts. have a within assignments DIALOG in various his DIALOG role, management joining QA/QC Originally and industry. gas oil, the petrochemical in roles numerous in Lead experience a working 1995. is and in worldwide of Zealand years 34 over has He Auditor.Systems Quality New DIALOG from Assurance a Certificate Quality joined of qualifications, inspection He extensive holds Australia. He in Services T e a 2 yas f okn eprec i te i, a and gas petrochemical industryinSaudi oil, Arabia. the in the experience Region. working Gulf of serves years Arabian 27 the has that He in industry Port gas base and Commercial supply oil Jubail offshore a the of services in logistics located trading as and well services as services support equipment projects, minor services, industrial specialised of in consist which operations region business that the oversees currently He Arabia. Saudi for Manager Development Business and Sales the as 2007 in DIALOG joined first He 2013. June in Arabia Saudi an ndrew New Zealander, 61 DIALOG Services, Australia General Manager, ANDREW COPLAND Malaysian, 49 Saudi Arabia Country Manager, TAN NGEEMENG N CORPORATE GOVERNANCE gee C M opland eng a apitd onr Mngr for Manager Country appointed was s h Gnrl aae o DIALOG of Manager General the is ADDITIONAL INFORMATION INTERNATIONAL
33 DIALOG GROUP BERHAD Annual Report 2020 34 DIALOG GROUP BERHAD Annual Report 2020 INTERNATIONAL T 0 er o eprec i te aktn & ae of sales & marketing the in than experience more specialist products&servicesin Thailand. of cement, has years He utilities, industries. 20 retail, electronics energy, and banking, in the firms joining various covering for to consultant Thailand a Prior as London. worked he of DIALOG, University London, College Engineering of University from Engineering Mechanical in degree (Honours) Bachelor a holds He Engineer. in2009 Sales a DIALOG as joined first He 2015. July in Thailand for G ao poet wrdie hlig vrey f technical, of variety a project andseniormanagementpositions. holding on worldwide, worked projects he where major years 25 for International Shell with was he which of UK. experience, of years Mechanical 47 than Edinburgh, more 2012. has in He University, Degree November Heriot-Watt Science from in of Engineering DIALOG Bachelor a joined holds He He Gas. and Oil MANAGEMENT’S PROFILE irin eorge T ongp B ell atanakul
s h Drco o Egneig n Upstream in Engineering of Director the is
was appointed Country Manager Manager Country appointed was OVERVIEW Thai, 43 Thailand Country Manager, TIRIN TONGPATANAKUL British, 76 and Gas Engineering, UpstreamOil Director, G eorge B ell
KEY MESSAGES
atAi, n icue sm 8 er wrig o Sel in South Shell East Malaysia. for and working years 8 East some includes Middle and Asia, East America, and South technical Africa, of Europe, variety spans experience global a His positions. Shell management held senior project with he career and where lengthy International his development during extensive skills field acquired management has engineering, and industry gas reservoir and in oil experience the of DIALOG in years 47 than Sheffield more joined has from He Technology UK. University, in He Fuel Degree & Science Gas. of Engineering Bachelor Chemical a and holds He 2013. Oil March Upstream in M ike British, 72 Upstream OilandGas Petroleum Engineering, Director, M ike N N ewman ewman MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT s h Drco o Ptoem Engineering Petroleum of Director the is
CORPORATE MILESTONES • 2006 Transferred toKLSEMainBoard. 2000 Kertih, Terengganu, Malaysia. centralised tankagefacilityin and operateaRM600million Commenced tobuild,own 1997 RM55 million. with marketcapitalisationof • Secured 1 1988 Petaling Jaya,Malaysia. operations in Taman Mayang, Established andcommenced 1984 Listed onKLSE2 1996 rubber dippingfacilityinSriLanka. worth SGD32milliontobuilda
SUSTAINABILITY REPORT Middle East. Established presenceinthe Australia. Established presencein st majorEPCCcontract nd Board
EVENT &HIGHLIGHTS Malaysia. Mutiara Damansara,PetalingJaya, own building,DIALOG Headquarters relocatedtoourvery 2014 Indices. Included intheMSCIGlobalStandard 2013 Reserves (Sarawak). enhance BayanRecoverable Halliburton InternationalInc.to Entered intoajointventurewith 2012 • • 2011 Deepwater Terminals. Began developmentofPengerang 2009 Johor, Malaysia. terminals facilityin operate aRM700milliontank Commenced tobuild,ownand 2007
Marginal Fields(Sarawak). Petronas CarigalitodevelopBalai Partnered ROCOilMalaysiaand New Zealand. Established presencein Tanjung Langsat, Tower in CORPORATE GOVERNANCE
• 2018 Deepwater Terminals. Carrier (VLCC)atPengerang Arrival ofthefirst Very LargeCrude 2015 Deepwater Terminals. Official openingofPengerang 2014 of 2,900in10countries. September 2020andstaff strength capitalisation ofRM22billionasat Bursa Malaysiawithamarket Listed onMainMarketof Today Bayan PetroleumSdnBhdto95%. Increased stakeinHalliburton 2019 •
of DIALOG Acquired theremaininginterests Included intotheFBMKLCI. Terminals Langsat. ADDITIONAL INFORMATION 35 DIALOG GROUP BERHAD Annual Report 2020 OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
WHAT WE DO
UPSTREAM MIDSTREAM DOWNSTREAM
DIALOG’s diversified business model is well structured to manage and sustain itself through oil price volatility and currency movements.
I H S M N 36 37
D R T S TECH
UPSTREAM ASSETS & SERVICES MIDSTREAM ASSETS & SERVICES INTEGRATED TECHNICAL SERVICES
DIALOG’s involvement in upstream is via investment and DIALOG designs, builds, owns and operates both The foundation of DIALOG’s business is based upon its extensive the provision of services comprising the following: independent storage and industrial terminals – storing experience and solid reputation as a provider of a wide range of and handling a variety of crude oil, petroleum, Liquefied integrated technical services across the oil, gas and petrochemical i) 20% participating interest in a Production Sharing Natural Gas (“LNG”) and petrochemical products. value chain, serving customers locally and the world over. These Contract (“PSC”) for three fields, D35, D21 and J4, DIALOG’s terminal assets comprise the following: integrated technical services comprise: located offshore Sarawak, Malaysia up to 2034; and • 2000 – Kertih Terminals Sdn. Bhd. • Engineering, Procurement, Construction & Commissioning ii) The provision of services as independent technical • 2009 – Dialog Terminals Langsat (1) Sdn. Bhd. and for oil, gas and petrochemical projects contractor to PETRONAS Carigali Sdn. Bhd. via Dialog Terminals Langsat (2) Sdn. Bhd. • Plant Maintenance & Catalyst Handling Services to an Oilfield Services Contract (“OSC”) up to 2036, to • 2014 – Pengerang Independent Terminals Sdn. Bhd. refineries and plant operators around the world enhance recoverable reserves from the Bayan Field, • 2017 – Pengerang LNG (Two) Sdn. Bhd. • Specialist Products & Services in collaboration with located offshore Sarawak, Malaysia – through its reputable technology partners joint venture, Halliburton Bayan Petroleum Sdn. Bhd. • 2018 – Pengerang Terminals (Two) Sdn. Bhd. • Fabrication of machinery and process equipment for plants (“HBP”). • 2019 – Dialog Terminals Langsat (3) Sdn. Bhd. and upstream production facilities
Annual Report 2020 BERHAD DIALOG GROUP • 2021 – Dialog Terminals Pengerang (5) Sdn. Bhd. Annual Report 2020 BERHAD DIALOG GROUP In FY2020, DIALOG acquired an additional 45% equity • Digital Technology & Solutions using our proprietary stake in HBP, and HBP is now a 95% owned indirect As a trusted terminals service provider for the last 20 technology to modernise processes and improve efficiency subsidiary of DIALOG. years, our clients and partners comprise multinational oil Our integrated technical services provide the Group with the ability majors, national oil companies and international market This is in line with DIALOG’s strategy since 2011, to to offer services and solutions across the upstream, midstream players. develop its upstream capabilities through the rejuvenation and downstream sectors of the oil, gas and petrochemical industry. and redevelopment of producing and mature oilfields only. In addition to petroleum storage terminals, DIALOG also Our upstream activities provide long term recurring income, owns a supply base in Jubail, Saudi Arabia, which serves and added opportunities for DIALOG to participate in other as a one-stop logistics hub and resource centre for oilfield parts of the value chain in the field redevelopment cycle, services, equipment and supplies. particularly in the provision of engineering and specialist technical services. Overall, our continued investment in our Midstream operating assets is in line with the Group’s long-term strategy to increase earnings stability and grow recurring income for the Group. 38 DIALOG GROUP BERHAD Annual Report 2020 INPUTS FOR VALUE CREATION OUR BUSINESSMODEL PLANET PEOPLE PERFORMANCE ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ ¶ RM3.9 bil FY2019 EQUITY T
O ~1,200 acresof landinPengerangDeepwater Green practicesinwaterand energy use Supply BaseinSaudi of talent Investing inactiverecruitment,developmentandretention W 5 27 worksites(includingfabricationyards)in7countries 1 Emphasis onlocalhiring Corporate SocialResponsibilityinitiatives partners, bankers,regulatorsandgovernmentauthorities Active engagementwithallstakeholders-customers,suppliers, Proprietary technologysolutions Established deliveryandexecutiontrackrecord >30 yearsexperienceservicingtheoil,gas&petrochemicalindustry T 1 offices across10countries Terminals withtotalcapacityof4.6million m orkforce of2,900employeesacross10countries AL M N H S F I ENVIRONMENTAL MANAGEMENT NATURALCAPITAL AND MANUFACTURED CAPITAL SOCIAL CAPITAL HUMAN CAPITAL INTELLECTUAL CAPITAL FINANCIAL CAPITAL RM1.7 bil FY2019 BORROWINGS T OVERVIEW O T AL Arabia RM884 mil FY2019 EQUIVALENTS CASH &
KEY MESSAGES 3 Terminals in Malaysia RM6.7 bil FY2019 ASSETS T O T AL
MANAGEMENT DISCUSSION ANDANALYSISMANAGEMENT
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H S E EVENT &HIGHLIGHTS FY2020 ON EQUITY RETURN ¶ ¶ ¶ ENVIRONMENTAL PROTECTION ¶ ¶ ¶ GLOBAL PRESENCE&NETWORK ¶ ¶ ¶ STRONG CONNECTEDCOMMUNITIES ¶ ¶ ¶ DIVERSE &MULTI-SKILLED WORKFORCE ¶ ¶ ¶ MARKET LEADERSHIP 15.9% ENHANCING SHAREHOLDERVALUE www.
SIRIM QAS/IQNET Management Plans Environmental ManagementPlans &EnvironmentMonitoring Detailed EnvironmentalImpact Geographical diversificationfortheGroup Cross-functional andgeographicalworkforcemobility International networkofcustomersandpartners Positive socialimpactinthecommunitieswhereweoperate Economic developmentinourlocationsofoperations Long establishedrelationshipswithstakeholders T Talent &genderdiversityintheworkforce Talent Developmentacrossalllevelsoftheorganisation Competitive advantage Able toprovideservicesacrosstheoil&gasvaluechain petrochemical industry Leading integratedtechnicalserviceprovidertotheoil,gas& Health, Safety&Environment, SustainabilityReport:pages70to78 www.dialogasia.com/worldwide-locations Global Presence:page40,GroupCorporateDirectory:pages121to122 Corporate SocialResponsibility, SustainabilityReport:pages86to92 Management Discussionand Analysis: pages42to62,Strategic Alliances: page62 Learning &Development,SustainabilityReport:pages83to85 Our People,SustainabilityReport:pages79to82 What We Do:pages36to37 Economic Performance,SustainabilityReport:pages68to69 DIALOG FinancialStatements2020,ManagementDiscussionand Analysis: pages42to62 alent retention OIL, GAS&PETROCHEMICAL INDUSTRY CORPORATE GOVERNANCE RM648 mil FY2020 PROFIT NET ISO14001Certifications Assessments RM4.2 bil FY2020 EQUITY T O D T AL
OUTPUTS R ADDITIONAL INFORMATION DIVIDEND RM175 mil FY2020 T T O T AL
S
TECH 39 DIALOG GROUP BERHAD Annual Report 2020 OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS
GLOBAL PRESENCE H M N Management ESTABLISHED IN 1984, DIALOG IS A LEADING INTEGRATED TECHNICAL SERVICE PROVIDER TO THE UPSTREAM, MIDSTREAM AND DOWNSTREAM SECTORS OF THE OIL, GAS AND PETROCHEMICAL INDUSTRY. OVER THE YEARS, Discussion DIALOG HAS GROWN FROM STRENGTH TO STRENGTH IN THE INDUSTRY, BOTH ORGANICALLY AND THROUGH STRATEGIC ALLIANCES WITH INTERNATIONALLY RENOWNED TECHNOLOGY PARTNERS. And Analysis
Headquartered in Kuala Lumpur, 42 Statement from The Group’s DIALOG is truly a global player given Chief Operating Officer the Group’s strong and growing 46 Financial Performance Review presence across ten countries with 48 Key Performance Indicators a staff strength of 2,900. DIALOG 49 5-Year Financial Summary CHINA has offices and facilities in Malaysia, Singapore, Thailand, Indonesia, 50 FY2020 Review of Operations SAUDI China, Australia, New Zealand, 56 Awards and Achievements ARABIA Philippines, Saudi Arabia and United UAE 58 Key Risks and Opportunities 40 Arab Emirates. Such strategic 62 Strategic Alliances THAILAND locations bode well for DIALOG as the Group is able to operate from PHILIPPINES MALAYSIA a position of strength in tapping SINGAPORE synergistic benefits in readily serving a diverse range of customers that include INDONESIA multinational oil majors, national oil companies as well as multinational engineering and service providers AUSTRALIA located throughout the world. DIALOG is listed on the Main Market of Bursa Malaysia Securities Berhad NEW ZEALAND (“Bursa Malaysia”) and has a market capitalisation of about RM22 billion as at September 2020. DIALOG was included into the FTSE Bursa Malaysia HEAD OFFICE OFFICES CLIENT NETWORK KLCI on 18 June 2018.
Throughout the industry, the Group is highly regarded and respected as a trusted and dependable provider of comprehensive services that encompass: Annual Report 2020 BERHAD DIALOG GROUP
Engineering, Upstream Procurement, Assets & Services Construction & Midstream Commissioning Assets & Specialist Services – Digital Products & Technology Tank Terminals Services & Solutions & Supply Base Plant Maintenance & Catalyst Fabrication Handling Services
Group Corporate Directory: pages 121 to 122
www. www.dialogasia.com/worldwide-locations Product Tanks, Service Water Tanks and Loading Pump Station of Phase 3, Pengerang Deepwater Terminals OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
MANAGEMENT DISCUSSION AND ANALYSIS
STATEMENT FROM THE GROUP'S ‘‘ Unfortunately, we regret to report that during the financial year, a CHIEF OPERATING OFFICER Despite the economic contractor fatality was recorded at DIALOG Terminals Langsat (1) downturn owing to the Sdn. Bhd. during renovation works at the office building. A thorough investigation of the incident was conducted, and measures to COVID-19 pandemic, further strengthen and enhance our Health, Safety & Environment (“HSE”) policies and procedures have been implemented. We will DIALOG’s business continue to reinforce our commitment to safety, whether it involves operations remained our employees or contractors, and be persistent in instilling a Safety First culture in every aspect of our operations. HSE is everyone’s resilient in FY2020. responsibility and must be the utmost priority in our daily tasks. 42 Moving forward, our focus will be to increase the adoption and use 43 The Group witnessed of technology to manage our HSE risks. several significant Health, Safety & Environment, Sustainability Report: pages 70 to 78 milestones, such On the midstream front, our focus during the year was on the phased capacity expansions in our terminals business. We successfully as timely capacity completed and fully operationalised the expansion of an additional expansions in our 430,000 m3 of storage capacity at Pengerang Independent Terminals Sdn. Bhd. (“PITSB”), and 120,000 m3 of storage capacity at DIALOG MUSTAFFA KAMAL BIN ABU BAKAR terminals business, Terminals Langsat (3) Sdn. Bhd. (“DTL3”). These capacity additions Chief Operating Officer proved to be timely and we were able to capture the increased successful delivery of demand for storage during the year. The addition of another numerous turnaround 85,000 m3 to DTL3 is now in progress and is scheduled for completion by end 2021. and plant rejuvenation projects, and the We successfully completed and
further elevation of our fully operationalised the expansion
upstream capabilities of an additional through a successful ‘‘ 430,000 m3 Annual Report 2020 BERHAD DIALOG GROUP acquisition exercise. of storage capacity at Annual Report 2020 BERHAD DIALOG GROUP Pengerang Independent Terminals Sdn. Bhd. and 120,000 m3 of storage capacity at
F I H S M N D R T S TECH DIALOG Terminals Langsat (3) Sdn. Bhd. OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
MANAGEMENT DISCUSSION AND ANALYSIS
Assumed control of Halliburton Bayan Petroleum Sdn. Bhd. upon the successful acquisition
of another 45% equity stake from Halliburton International, Inc
44 45
On track to complete and commission storage tanks with a capacity of
430,000 m3 for PDT’s Phase 3A
Annual Report 2020 BERHAD DIALOG GROUP Phase 3A Pengerang Deepwater Terminals Deck extension ready for installation Annual Report 2020 BERHAD DIALOG GROUP
During the year, we also completed the reclamation of 300 FY2020 was also by far, one of the busiest years for our In the Upstream sector, we assumed control of Halliburton We continue to invest in technology and develop new acres of land in PDT, and continued to make good progress Plant Maintenance Division, with the completion of a record Bayan Petroleum Sdn. Bhd. (“HBP”) upon the successful solutions to manage our operations and differentiate in the development of common tankage facilities, including number of plant turnaround and rejuvenation projects. acquisition of another 45% equity stake from Halliburton ourselves from our competitors, with key outcomes targeted shared infrastructure and deepwater marine facilities for This was in line with the award of the 5-year Groupwide International, Inc. The acquisition represents the significant at safety, efficiency and reliability. Combined with our culture PDT Phase 3 (“PDT3”). We remain on track to complete Master Service Agreement (with the option to extend) by progress we have made in the building of our Upstream of continuous learning and improvement, we aim to build and commission the storage tanks with a capacity of PETRONAS for Integrated Turnaround Main Mechanical and capabilities over the last 9 years. Moving forward, we on our strengths, improve on our weaknesses, and mitigate 430,000 m3 for PDT’s Phase 3A, in line with the Long-Term Maintenance Mechanical Static last year. Additionally, the will continue to pursue our Production Enhancement and our risks so that we may continue to exceed our clients’ and Storage Agreement (“LTSA”) signed with BP Singapore Pte. division clocked a total of 2 million man-hours in relation to Redevelopment strategies in both the Bayan and D35/J4/ stakeholders’ expectations. Limited (“BPS”), by mid-2021. plant turnaround works alone. These projects were D21 Fields, whilst actively collaborating with our respective completed successfully, meeting all the crucial key partners to optimise costs and manage cashflow diligently in performance indices, and would not have been possible the current economic climate. without the great teamwork and dedication of all the project teams, working together efficiently across all levels. OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
FINANCIAL PERFORMANCE REVIEW
F I S M D R S
TOTAL ASSETS During the year, the Group spent a total of RM537.6 million Capital Management
3,393 for the construction of a storage terminal, common tankage
3,111 The Group’s total assets stood at RM7.19 billion as at 30 June facilities with shared infrastructure, and deepwater marine The primary objective of the Group’s capital management 2020, representing an increase of RM480.3 million (7.2%) strategies is to maintain a strong capital base, a good credit
2,534 facilities at Jetty 3 for PDT3. These facilities are currently 2,386 from RM6.71 billion a year ago. rating, and healthy capital ratios to support its businesses 2,303 under construction and expected to commence operations in mid-2021. and maximise its shareholder value. The Group does this by 17% 32% 21% 18% using various methods including new share issuances, share Additionally, the Group spent a total of RM110.9 million buy-backs, cash and share dividends, and debt financing. on property, plant and equipment for its other various 648 13% FY2019 17% FY2020 The Group monitors capital utilisation on the basis of its
552 business activities during the financial year under review.
528 net debt to equity ratio. The net debt to equity ratio as at
373 28%
46 301 Cash and Bank Balances 30 June 2020 and 30 June 2019 are as follows: 47 18% 20% 16%
2016 2017 2018 2019 2020 The Group’s cash and bank balances as at 30 June 2020 2019 2020 Investments in Joint Ventures & Associates Revenue Profit After Tax increased by 40.3% to RM1.24 billion from RM884.4 million RM’000 RM’000 Property, Plant & Equipment a year ago, mainly attributable to net cash generated from Borrowings (1,674,363) (1,911,145) The Group delivered another commendable financial Trade and Other Receivables operating activities amounting to RM846.6 million and Less: Cash and bank balances 884,403 1,240,389 performance for the financial year ended 30 June 2020. Cash and Bank Balances proceeds from redemption of preference shares in a joint While the RM2.30 billion in revenue was lower by 3.5%, Other Assets venture company amounting to RM383.8 million. Net borrowings (789,960) (670,756) the Group’s profit after tax rose by 17.3% to RM648.1 million Total equity attributable to 3,791,232 4,132,147 The Group’s cash outflows during the financial year were from RM552.3 million a year ago. shareholders Investment in Joint Ventures and Associates mainly for its continuing investments in PDT3 development 0.16 projects and the Phase 1E expansion, which amounted to Net debt to equity ratio 0.21 The better financial performance achieved in the current The Group’s investments in joint ventures and associates RM649.0 million. The Group also spent RM210.0 million on its financial year was mainly attributable to Malaysia operations decreased by RM854.1 million or 40.0% to RM1.28 billion Total equity attributable to shareholders rose by RM340.9 upstream developments for the Production Sharing Contract which saw higher contributions from the Group’s terminals as at 30 June 2020, from RM2.14 billion in the previous million, primarily contributed by profits for the financial year, at D35/J4/D21 Oil Fields and Bayan Oilfield Services Contract business, in particular DIALOG Terminals Langsat ("DTL") financial year. offset by dividend payments made during the financial year. and Pengerang Independent Terminals (“PITSB”). During at Bintulu, Sarawak, as well as the acquisition of additional the current financial year, DIALOG Terminals Langsat 3 The decrease in the investments were mainly attributable to 45% equity interest in HBP. This was in addition to RM110.9 Capital Commitments commenced operations for its 120,000 m3 storage facility the redemption of redeemable preference shares amounting million spent on property, plant and equipment for its other As at 30 June 2020, the Group’s total capital commitments and PITSB Phase 1E also commenced operations for its to RM383.8 million in Pengerang Terminals (Two) Sdn. Bhd., various business activities during the year. Total dividend paid approved for property, plant and equipment was RM10.3 430,000 m3 storage facility expansion. With these, the and partial repayment and reclassification of shareholders’ during the year amounted to RM197.3 million. million, of which RM6.1 million has been contracted but not storage capacities at DTL and PITSB total 770,000 m3 and loan amounting to RM503.3 million from Pengerang LNG Talot Liabilities provided for. 1.7 million m3 respectively, and are currently fully leased out. (Two) Sdn. Bhd. to current assets.
Annual Report 2020 BERHAD DIALOG GROUP The Group’s total liabilities as at 30 June 2020 was RM2.95 In addition, the Group had capital commitments approved for Annual Report 2020 BERHAD DIALOG GROUP On the International front, the net profit contribution for the During the financial year, the Group's acquisition of an billion or 5.1% higher against RM2.80 billion a year ago. its tank terminals business amounting to RM778.0 million. current financial year decreased mainly due to reduced supply additional 45% equity interest in HBP resulted in a reduction This commitment mainly relates to the Group’s investments base activities in Saudi Arabia and lower margins earned on in investments in joint ventures by RM115.3 million as HBP 3% 3% in the PDT3 development. specialist products and services sales, and engineering and became a 95% owned subsidiary of the Group. construction activities performed. The decrease was partially offset by the Group’s In the upstream sector, the capital commitments as at 37% 32% 30 June 2020 was RM408.0 million, mainly for the Field In August 2019, the Group acquired an additional 25% additional investment in PITSB of RM52.5 million, for its FY2019 FY2020 3 Development Plan activities under the Bayan Oilfield equity interest in a jointly controlled entity, Halliburton Bayan 430,000 m Phase 1E expansion. Services Contract and D35/J4/D21 Production Sharing Petroleum Sdn. Bhd. (“HBP”). Following that, the Group Contract. booked a RM28.5 million non-cash fair value gain arising Property, Plant and Equipment 60% 65% from the business combination of a jointly controlled entity to The Group’s property, plant and equipment increased by Borrowings a subsidiary company. Subsequently in December 2019, the RM722.0 million or 55.4% from RM1.30 billion in the previous Dialog Financial Statements 2020 Group acquired a further 20% equity interest in HBP and HBP Trade and Other Payables financial year to RM2.03 billion as at 30 June 2020. www. became a 95% owned subsidiary of the Group. Other Liabilities Investors Segment, www.dialogasia.com OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
KEY PERFORMANCE INDICATORS 5-YEAR FINANCIAL SUMMARY
F H S D R S
KEY FINANCIAL RESULTS (RM' million) 2016 2017 2018 2019 2020 DIALOG’s Key Performance Indicators ("KPIs") measure the Group’s success in maintaining value through sustainable Revenue 2,534 3,393 3,111 2,386 2,303 earnings growth, driving business excellence as well as its ability to operate safely and effectively. The Group continually Profit before tax 369 449 628 653 747 monitors and, when necessary, revise these targets to take into account refinements in the Group's strategy. Profit after tax 301 373 528 552 648 Non-controlling interests (6) (2) (18) (16) (18) Profit attributable to shareholders of the Company 295 371 510 536 630 FINANCIAL KPIs ASSETS (RM' million) Earnings Growth (%) Return on Equity (%) Current Ratio Net Gearing Dividend Payout (%) Non-Current Assets Double digit growth* A minimum of 12% returns* Maintain 1.50 and above Maintain at 0.5 and below Minimum 40% payout ratio* Property, plant and equipment 583 584 1,297 1,304 2,026 Investments in joint ventures and associates 1,291 1,962 2,043 2,138 1,283 Others 472 512 658 1,053 1,388 1.69 15.2 24.0 41 Total Non-Current Assets 2,346 3,058 3,998 4,495 4,697 1.55 40 1.50 14.7 13.6
48 19.4 Current Assets 49
12.2 Trade and other receivables 705 770 768 927 648
0.16 Cash and bank balances 944 1,425 1,265 884 1,240 29 601
0.21 Others 141 564 334 404
0.10 Total Current Assets 1,790 2,759 2,367 2,215 2,489 Assets classified as held for sale - - - - 4 TOTAL ASSETS 4,136 5,817 6,365 6,710 7,190 ‘18 ‘19 '20 ‘18 ‘19 '20 ‘18 ‘19 '20 ‘19‘18 '20 ‘18 ‘19 '20
* The computation for FY2020 and FY2018 KPIs excluded fair value gains recorded on deemed disposal of jointly controlled entities amounting to EQUITY AND LIABILITIES (RM' million) RM28.5 million and RM65.6 million, respectively. Equity attributable to shareholders of the Company 1,684 DIALOG Financial Statements 2020 Share capital 527 1,601 1,684 1,684 Treasury shares (4) (4) (4) (4) (4) Reserves 1,891 1,514 1,820 2,111 2,452 For FY2020, the Board recommended a final cash dividend of 1.90 sen per ordinary share, amounting to approximately 2,414 3,111 3,500 3,791 4,132
RM107.2 million. This is in addition to the payment of interim cash dividend of 1.20 sen per ordinary share amounting to Non-controlling interests 69 81 99 117 112 RM67.7 million paid in June 2020. In total, the Group will be paying a cash dividend of approximately RM174.9 million for TOTAL EQUITY 2,483 3,192 3,599 3,908 4,244 FY2020 which is equivalent to 29% of profits attributable to shareholders. The Board's dividend recommendation is for the LIABILITIES purpose of conserving cash, given the continued need to exercise financial prudence in the current economic environment Non-Current Liabilities which is expected to remain extremely challenging in the short to medium term. Borrowings 713 1,009 1,233 1,318 1,454 Lease liabilities - - - - 14 Others 5 6 6 5 4 NON-FINANCIAL KPIs Total Non-Current Liabilities 718 1,015 1,239 1,323 1,472 Current Liabilities Health & Safety- Health & Safety- Health & Safety- Quality Assurance/ 931
Annual Report 2020 BERHAD DIALOG GROUP Trade and other payables 740 1,146 1,075 1,050 Annual Report 2020 BERHAD DIALOG GROUP Lost Time Injury Rate Total Recordable Fatality Quality Control Borrowings 162 415 378 356 458 Incident Rate Lease liabilities - - - - 5 Others 33 49 74 73 80 Not exceeding 0.15** Not exceeding 0.58** Zero fatality** Zero non-conformance Total Current Liabilities 935 1,610 1,527 1,479 1,474 TOTAL LIABILITIES 1,653 2,625 2,766 2,802 2,946 0.29 1 1 0.92 TOTAL EQUITY AND LIABILITIES 4,136 5,817 6,365 6,710 7,190 0.55 Financial Ratios 0.39 Earnings Growth (%) 5.6 23.8 24.0 19.4 17.3
0.06 Return on Equity (%) 13.4 13.4 13.6 14.7 15.9 0.05 Current Ratio 1.92 1.71 1.55 1.50 1.69 Net Gearing Ratio NET CASH NET CASH 0.10 0.21 0.16 0 0 0 0 Dividend Payout (%) 40 40 41 40 28 ‘18 ‘19 '20 ‘18 ‘19 '20 ‘18 ‘19 '20 ‘19‘18 '20 Share Information ** The details are set out in the Sustainability Report. Earnings per share (sen) 5.70 6.88 9.06 9.50 11.18 Dividend per share (sen) 2.20 2.65 3.20 3.80 3.10 Sustainability Report: pages 64 to 92 Net assets per share (sen) 46.7 57.8 62.1 67.2 73.3 Quality Assurance and Quality Control: pages 56 to 57 Number of ordinary shares ('million) 5,269 5,592 5,642 5,642 5,642
Dialog Financial Statements 2020 OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
FY2020 REVIEW OF OPERATIONS
I H S M N D R T S TECH
MALAYSIA products for the Long Term Storage Agreement (“LTSA”) Pengerang Marine Operations Sdn. Bhd. (“PMOSB”) with BP Singapore Pte. Limited (“BPS”), and common manages and handles all marine services within PDT. Together tankage facilities including shared infrastructure and Jetty 3, with its Marine Auxiliary Police Team, PMOSB also provides remain on track for completion by mid-2021. round-the-clock marine security coverage and protection for all stakeholders in PDT. In FY2020, there was an increase of ‘‘We are making Upon completion, PDT3 will be a one-stop integrated incoming vessels with all jetties almost at full capacity, with good headway terminal that offers Port and Marine Operations, Storage 1091 vessels (FY2019: 532 vessels) and total throughput of Tank Terminals and Common Facilities including deepwater 30 million metric tonnes (“MT”) (FY2019: 15.7 million MT). in bringing the jetty facilities, integrated berth planning, cargo handling, Established since 2014, PMOSB has received more than interconnecting pipelines across PDT, multi-product storage, 3,200 vessels with throughput of more than 90 million MT, total capacity integrated infrastructure solutions and shared third party 50 inclusive of 56 Very Large Crude Carriers (“VLCC”) and 80 51 at the Langsat utilities and services. In summary, PDT3 will offer a ‘plug LNG vessels. and play’ concept to our clients, facilitating easy set up for facility to over customers and investors. Furthermore, PDT3 will support During the year, we continued to improve our terminal 1.0 million m3, downstream petrochemical manufacturing activities within the operation practices in line with our Terminals Operability, Pengerang Integrated Petroleum Complex. Reliability, Environmental, Safety (“TORES”) assessment
from its present results, and also launched 10 Critical Safety Elements in line The phased capacity expansions across our terminals with our continuous emphasis on HSE excellence. capacity of ‘‘ business as mentioned above and the continued development 770,000 m3 of Pengerang Deepwater Terminals is in line with the Group’s On the Downstream front, our Plant Maintenance Division longer term strategy to grow its midstream terminals business had one of its busiest years involving in numerous turnaround DIALOG Terminals Langsat to generate sustainable & recurring income. Overall, our and plant rejuvenation projects in FY2020. The division terminals business continued to register sustainable specialises in providing a wide range of maintenance, profits during the period under review and has contributed specialist services, plant shutdown and turnaround services Our Malaysian operations remained resilient in FY2020, as Over at Pengerang Deepwater Terminals (“PDT”) – we also significantly to the resilience of the Group’s performance for refineries, petrochemical, gas and chemical plants. we remained busy with various activities across the upstream, saw the successful completion and commissioning of the during the year. midstream and downstream sectors during the year. expansion of an additional 430,000 m3 of storage capacity at Phase 1E in Pengerang Independent Terminals Sdn. Bhd. At DIALOG Terminals Langsat, we successfully completed (“PITSB”). PITSB blends and distributes crude and petroleum 3 and commissioned 120,000 m of storage capacity at Dialog products for oil majors and traders in the region. This now Terminals Langsat (3) Sdn. Bhd. (“DTL3”), thus bringing the brings the total capacity at PITSB to 1.7 million m3. total capacity at our Langsat Facility to 770,000 m3 presently. The timely additions of the capacities above boded well for We are now working on the expansion of another 85,000 m3 at Annual Report 2020 BERHAD DIALOG GROUP the Group, as we were able to benefit from the increase in Annual Report 2020 BERHAD DIALOG GROUP our Langsat facility to store clean petroleum products, which demand for storage during the year. is expected to be completed and ready for operations by Quarter 4 of 2021. DIALOG’s strategy for its Langsat facility is In Phase 2 of PDT, the ongoing operations of Pengerang to continue to enhance its value proposition by enhancing its Terminals (Two) Sdn. Bhd. (“PT2SB”) and Pengerang LNG efficiencies and product storage flexibility. (Two) Sdn. Bhd. (“PLNG2”) continued to contribute to the Group’s performance during the year. After this expansion of 85,000 m3 storage capacity, DIALOG still has 17 acres of land which can add approximately In Phase 3 (“PDT3”), we completed the reclamation of 300 another 200,000 m3 of storage capacity to DIALOG Terminals acres of land in December 2019 and the ongoing development Langsat over the longer term, thus bringing the total capacity of dedicated petroleum and petrochemical storage terminals at the Langsat facility to over 1.0 million m3, from its present carried on without significant interruption during the year. The capacity of 770,000 m3. development of 430,000 m3 storage tanks for clean petroleum
Phase 1E, Pengerang Independent Terminals OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
FY2020 REVIEW OF OPERATIONS
The business environment for our Fibreglass Reinforced Oil price volatility will continue to influence the performance Plastic (“FRP”) division continued to be challenging, with of our upstream assets and we have been monitoring global significant competition from commoditised products, and the developments closely. We have taken proactive steps in low oil price environment towards the last quarter of FY2020. collaboration with our partners to mitigate its impact. These Nonetheless, FRP was able to secure new work from Petronas include cost optimisation and cash flow management Carigali in Myanmar. initiatives, and the ongoing review of capital and operational expenditures. Specialist Products & Services (“SPS”) Malaysia is the Group’s trading arm for specialty products and services for DIV Services (“DIV”), the digital arm of the Group continues oil and gas, petrochemical and refinery markets. In FY2020, to nurture in-house expertise to innovate and develop new SPS Malaysia recorded higher growth in revenue compared technologies in oil and gas, and deploy enterprise-wide 52 53 to the previous year, contributed mainly by higher sales of solutions to automate and digitise work processes to drive digital and automation solutions. efficiency and productivity across the Group. During the year under review, DIV continued to enhance the Group’s In line with Industry 4.0 initiatives, SPS Malaysia is targeting proprietary software applications as well as develop new to expand market share in the Upstream, Downstream and ones such as our Terminal Management System (“TMS”) and Power Plant sectors, focusing on Digitalisation and Automated Fleet Management System (“FMS”). Control Systems in partnership with Honeywell. The division also continues to supply drilling fluid, catalysts, valves and Pre-COVID-19, the Group had already embarked on compressor blowers to major oil and gas companies in initiatives such as the implementation of cloud-based Malaysia. collaboration platforms, as part of its ongoing digitisation plans. This enabled the Group to transition to work-from- Deck extension for Bayan Field Meanwhile, in the Upstream sector, we successfully completed home arrangements in record time, and with minimal the acquisition of an additional 25% and 20% equity stake disruptions to our operations when the various lockdowns We participated and successfully executed back-to-back For our Engineering & Construction (“E&C”) division, aside in Halliburton Bayan Petroleum Sdn. Bhd. (“HBP”) from our were implemented. Besides supporting the Group, DIV shutdown, turnaround and plant rejuvenation projects, from the successful delivery of the capacity expansions in joint venture partner, Halliburton International, Inc., in August continues to provide cashless payment solutions focusing namely at Petronas Chemicals Olefin, Glycol & Derivatives DTL3 and PITSB, and the ongoing development of Phase 2019 and December 2019 respectively. This resulted in HBP on the areas of welfare, education and recycling. (“PCOGD”), Petronas Chemicals Ammonia (“PCASB”), 3, E&C successfully completed the construction of H2S and becoming a subsidiary of the Group with effect from August BASF-Petronas Chemical Plants (“BPC”) at Gebeng, Gas MESH process units for Arkema Thiochemicals in its K2 2019. Processing Santong, Petronas Gas Bhd (“PGB”) and Melaka project in Kerteh, and tank bottom plate replacement works HBP is the independent technical service contractor for the ‘‘ Refining Company (“MRCSB”). Among them, the largest for Shell Trading Malaysia in Westport. E&C also completed Oilfield Services Contract (“OSC”) entered into with Petronas The Group had already turnaround project undertaken was the PSR2 Turnaround a crucial project to support the drilling campaign at the Carigali Sdn. Bhd. (“PCSB”), to provide Contractor Services at MRCSB, where a workforce more than 3,000 strong was Bayan Field during the year. It comprised of the engineering, embarked on initiatives such required to enhance the recoverable reserves from the Bayan Annual Report 2020 BERHAD DIALOG GROUP deployed during the 1-month work schedule. procurement, fabrication, installation and commissioning Annual Report 2020 BERHAD DIALOG GROUP Field. The Bayan Field is located offshore Bintulu, Sarawak as the implementation of (“EPCIC”) of a deck extension as well as modifications across with a term of 24 years (up to 2036). These projects were completed successfully, meeting all three platforms that was awarded by Petronas Carigali. cloud-based collaboration the crucial key performance indices, namely zero Loss Time Aside from the acquisition, FY2020 continued to see rigorous platforms, as part of its Injuries, zero leaks and on-time completion. Alongside all of the above, E&C also continued to tirelessly Production Enhancement and Development initiatives for pursue new opportunities during the year under review, which ongoing digitisation plans. both the OSC and the D35/J4/D21 Production Sharing In addition to plant maintenance expertise, the division also resulted in two new job awards by Petronas Gas Bhd for a
Contract (“PSC”). The redevelopment drilling programmes in This enabled the Group to provides services for commissioning and maintenance of steam pipeline project in Gebeng as well as a FEED study for
the OSC and PSC were executed both efficiently and safely catalytic reactors, vessels and columns. Catalyst Services a new LNG Filling Terminal at Bintulu. transition to work-from-home also witnessed a busy year, involving multiple catalyst during the year, and the wells drilled are expected to enhance ‘‘ handling projects both in shutdown environments, as well Fabrication activities were higher this year mainly in support production from these fields significantly. arrangements in record time. as at offshore platforms across Malaysia, Brunei, Indonesia, of major projects, E&C and OTEC. During the year, it also Thailand and Australia. In Australia, we continued to leverage completed the supply of Mercury Removal Units associated on our catalyst handling track record and expertise, to expand pressure vessels and filters for Bergading Platform for Hess and provide other specialised mechanical services. These Corporation. Current works include the supply of Mercury services were mainly focused in gas plants located in the Removal Units associated pressure vessels for the Kasawari eastern part of Australia. platform for MMHE, which is expected to be completed in the first quarter of 2021. OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
FY2020 REVIEW OF OPERATIONS
INTERNATIONAL
with Vopak for a new tank facility in Sydney. DFL also New Zealand. Our catalyst handling and mechanical services strengthened its regional dominance in heavy fabrication teams continue to service customers primarily in remote parts and was particularly busy building pressure vessels and heat of Australia and have now established a presence in the exchangers. Meanwhile, the engineering division established Gladstone region in Queensland. several important EPC opportunities with petrochemical and oil and gas clients in Taranaki. Our Middle East and South Asia SPS teams continued to hold on to their key markets for the year under review, specifically DFL is also exploring opportunities and continuing to look for for base oil supply in Oman and India. In FY2020, the team 54 business outside of oil and gas with emphasis on dairy and also expanded to new markets for existing products and was 55 pharmaceutical businesses. able to secure sales to Central Asia.
The year saw increased sales of drilling oils in response For our Saudi operations, Dialog Jubail Supply Base Co. to increased activity. The unit’s catalyst handling services Ltd. (“DJSB”) continued to support international oil and gas also expanded beyond its core catalyst handling to include companies in the Arabian Gulf, such as McDermott, Dynamic other specialised mechanical services. These services were Industries and COOEC. It also continued to form strategic focused on gas plants located in eastern Australia. partnerships with specialised service providers to provide value-added supply base services to clients. In FY2020, Separately in the Australia and New Zealand SPS business, DJSB recorded 983 vessel calls. DIALOG maintained its dominant share of the drilling base fluid market with strong sales to drilling campaigns in Western Dialog Services Saudi Arabia Co. Ltd. (“DSSA”) remained Large water intake pipes at DIALOG fabrication yard in Pengerang Australia and Victoria. While offshore drilling in the region has focused on specialised plant services to major plants in Saudi been disrupted by COVID-19, these activities are scheduled Arabia and continues to work closely with such petrochemical Our Singapore-based OTEC is an established Engineering, services made good strides and was awarded tank repair and to resume in the fourth quarter of 2021 in both Australia and majors such as SABIC, Saudi ARAMCO and Dow Chemicals. Procurement & Construction (“EPC”) Contractor that services modification works for 2 tanks for Oiltanking Singapore. Its the oil & gas industry with a specialisation in infrastructure good performance was rewarded by the award of a 3rd tank for and maintenance of tank storage terminals in Singapore and repair and modification works, which is currently in progress. in the South-East Asia region. The plant services team also completed 2 turnarounds for Shell Jurong Island Ethylene Oxide Glycol (“EOG”) Plant and In FY2020, OTEC successfully completed the 39m Large Airliquide, as well as a shutdown for Sembcorp. Cooling Water Intake Pipe fabrication project for Mitsui E&S Engineering Co. Ltd. in Central Java, Indonesia. OTEC DIALOG’s Indonesia team continued to focus on the Annual Report 2020 BERHAD DIALOG GROUP Annual Report 2020 BERHAD DIALOG GROUP also completed the fabrication work of the Largest External marketing of specialist products and services (“SPS”) such Floating Roof Tank to date of 102m diameter, in Pengerang as the supply of drilling oils and catalyst and production fabrication yard for ExxonMobil, Singapore. chemicals to upstream operators in Indonesia. Our clients include Pertamina, ExxonMobil, Conoco-Phillips and ENI. Despite the competitive business climate in FY2020, OTEC The team also provided plant maintenance and catalyst was also able to secure new projects and continue its handling services to oil, gas and petrochemical plants in expansion in the region, through its competitive pricing and Indonesia. impeccable track record. OTEC secured and is currently executing Vopak’s Ammonia Truck Loading Facility project in Similarly, in Thailand, our local trading arm is actively Singapore, whilst in the Philippines, OTEC has kept pace and supplying specialist products to the Thailand and Myanmar secured a second tankage project after the completion of its oil and gas industry. During the year, our DIALOG team in first project, a Vinyl Chloride Monomer Sphere Tank for JNC Thailand secured a new base oil supply agreement to Baker Engineering Co. Ltd., last year. Hughes in Myanmar, and also managed to introduce new catalyst products to the Thai downstream industry. Apart from Engineering & Construction services, other business activities in Singapore are plant services and sales The fabrication division in New Zealand and Australia under Construction of tanks at Vopak Terminal Sydney of specialty products such as catalyst and chemicals to Dialog Fitzroy Limited (“DFL”) had a reasonably good year. international oil and gas companies. During the year, plant In Australia, we were successful in securing an EPC contract OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
AWARDS AND ACHIEVEMENTS
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QUALITY ASSURANCE AND QUALITY CONTROL The previously established Quality Steering Committee Key activities in FY2020: Key activities targeted for FY2021: supports and strengthens DIALOG Group Management DIALOG takes pride in meeting customer needs by delivering and Quality Assurance and Quality Control ("QAQC") in After the successful approval and issuance of the integrated Merging the ISO certifications of the Malaysian businesses products and services of the highest quality, utilising the latest ensuring the effectiveness of the quality management DIALOG Group Quality Manual, Quality Policy and Procedures remains the Group’s target and is expected to be completed inspection techniques and technologies. system by sharing and analysing critical data related to replace individual Quality Management Systems for our by end 2020. This will ensure enhanced productivity and
Annual Report 2020 BERHAD DIALOG GROUP to quality performance indicators that are relevant to the Malaysian business units in FY2019, Group QAQC’s focus efficiencies from a single, uniform and standardised Group Annual Report 2020 BERHAD DIALOG GROUP Our quality standards are continually updated and improved Group. This dovetails with our commitment to the highest in FY2020 was to complete the roll-out of the standardized Quality Management System. group wide through uncompromising compliance with standards of quality throughout Group operations. monthly reporting process and document control system in regulatory and statutory standards. SharePoint for all projects. The roll-out has been completed Upon completion of the merging of ISO Certifications for the Currently, DIALOG through its subsidiaries is certified with successfully and Power BI is being used to extract data from Malaysian businesses, Group QAQC will proceed to roll it out The Group is committed to consistently maintaining its Quality the following: site registers for ease of reporting and establishing trend to our international operations. Management System to ISO 9001:2015 by identifying lessons analysis. learned and ensuring that risks that could affect product and a) ISO 9001:2015 Certification In addition to the above, the DIALOG Group Quality mission service quality are identified and addressed. b) ISO/TS 29001:2010 Certification Gaps are then identified by means of audits and trend for FY2021 is “Customer Satisfaction” and specific target c) American Society of Mechanical Engineers Certificates of analysis, and required training programs initiated to improve areas that have been identified are ISO Certification, The Group also diligently maintains the quality certifications Authorisation for "U", "U2", & "S" competency of personnel both at headquarters and at Inspector Competency, Trend Analysis and Improved of its subsidiaries. All ISO9001 certified organisations have respective project sites. Project Execution. successfully completed transition audits to the latest Quality d) National Board Certificate of Authorisation for "NB" and "R" Management System and are ISO 9001:2015 compliant. During the year under review, Group QAQC also kicked- e) Certificate of Manufacturing Assessment for Fibreglass off and made good progress on the merging of the ISO Reinforced Plastic products (Product Type Approval) certifications of the Malaysian businesses. OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
KEY RISKS AND OPPORTUNITIES
LINK TO LINK TO Business Risks, KEY RISKS DESCRIPTION IMPACT MITIGATING CONTROLS CAPITALS STRATEGIES Mitigating Controls and Opportunities The Group places very strong emphasis Non-compliance or a major HSE • Established and implemented HSE F T on Health, Safety & Environment (“HSE”) incident would affect the Group’s Management System ("HSEMS") across the Arising practices to ensure the safety of our business and its reputation. Group’s operations, including contractors, employees, stakeholders and assets, as suppliers and stakeholders. DIALOG’s culture and effective risk Health, Safety & Pandemic outbreak or public health H S well as the surrounding environment in • Audits and inspections are conducted management strategies enable the Group Environment crisis impacting employees’ health which we operate. periodically to ensure effective HSEMS to effectively manage our risk exposure could disrupt business operations. implementation and legal compliance. during operations. S TECH 58 • Continuous enhancement, trainings and 59 Key operational risks and their mitigating awareness of regulations, requirements and controls, together with the opportunities incident learnings are conducted to promote arising that form the basis of our core a strong HSE culture. strategies are summarised in the following • Target expectations and KPIs are set to table. The Group’s capital and financial create greater awareness and accountability risks are reported in the Notes to DIALOG’s for HSE performance. Financial Statements. • Adoption of internationally recognised certifications in maintaining a high HSE standards across DIALOG’s activities and businesses. • Implementation of, and adherence to relevant Standard Operating Procedures Health, Safety & and Guidelines in managing and minimising Capital and Financial Risk Management, DIALOG Environment, Sustainability Financial Statements 2020: pages 85 to 89 Report: pages 70 to 78 the impact of COVID-19 pandemic at the Learning & Development, Sustainability Report: work place and surrounding environment. pages 83 to 85 6 CAPITALS
F Financial H Human M Manufactured The global market’s economic, political and Oil price and currency volatility • The Group’s business diversification in F D social factors remain beyond the Group’s could adversely impact the Group’s upstream, midstream and downstream I Intellectual S SocialN Natural control. business performance and affect sectors of the oil, gas and petrochemical Annual Report 2020 BERHAD DIALOG GROUP Annual Report 2020 BERHAD DIALOG GROUP Market and the sustainability of the Group. industry enables it to manage through periods The oil and gas industry continues to of volatility in the market environment. I R 5 STRATEGIES Business experience market uncertainty resulting • Continuous strategic reviews of Group Environment from the COVID-19 pandemic outbreak, Diversification across the upstream, business strategies and tactics to ensure D geopolitical conflicts and fears of global S S midstream and downstream sectors operational sustainability. growth slowdown which may impact the R Growing long term Recurring income supply and demand equilibrium. • Ongoing engagement with existing and new clients / business partners to identify new T markets and business opportunities. T Active recruitment, development and retention of Talent • Prudent financial management to ensure Economic Performance, Cultivating strong relationships with the Group has the financial strength to TECH S Sustainability Report: Stakeholders pages 68 to 69 withstand periods of uncertainty. Development of proprietary Technology TECH Strategic Alliances: for use in our businesses page 62 OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS SUSTAINABILITY REPORT EVENT & HIGHLIGHTS CORPORATE GOVERNANCE ADDITIONAL INFORMATION
KEY RISKS AND OPPORTUNITIES
LINK TO LINK TO OPPORTUNITIES KEY RISKS DESCRIPTION IMPACT MITIGATING CONTROLS CAPITALS STRATEGIES Strategic Opportunities The Group is renowned for excellence in Any significant failure of internal • Leveraging on the Group’s core The diversification of the Group’s businesses, F T its delivery and execution of projects and processes, people and systems, or competencies, processes and network combined with its financial strength and strong services in the oil, gas and petrochemical arising from external events, would of facilities which enable us to achieve relationships with stakeholders, would provide industry. impact the Group’s ability to meet cost savings, improve efficiency and strategic opportunities for the Group during Operations its deliverables. productivity. I S different phases of the market cycle. • Ongoing project and operations monitoring Multi-skilled Workforce Synergies at various levels, including engagements H TECH 60 The Group’s diversified business model also with clients and relevant stakeholders, to 61 provides opportunities for us to attract, develop ensure timely completion within budget and retain a multi-skilled workforce, which can while meeting required HSE and quality S then be mobilised across the Group’s different standards. sectors during different phases of the market • Enhancement of the Group’s operational cycle. Management Discussion processes by way of continuous and Analysis: improvement, lessons learnt and adoption Competitive Advantages Through pages 42 to 62 of technology and best practices. Technology In addition to the above, the Group has the opportunity to enhance its competitive advantage The security of the Group’s employees, Security breaches or incidents can • The Group has established close F T through the adoption and/or development of new operating assets, facilities and cause operational disruptions to working relationships with relevant local technology to increase operational efficiencies, information systems are of paramount the Group. enforcement authorities for security patrols and maintain its delivery track record. importance. at our operating facilities. Security I S • The Group has security systems in place at all its work locations, covering physical and IT systems. They are regularly reviewed to H TECH ensure effectiveness. 6 CAPITALS • Continuous updates of the threat landscape and business environment, inclusive of F H M S Financial Human Manufactured awareness sessions, are carried out to enhance the Group’s IT security system I Intellectual S SocialN Natural Management Discussion Annual Report 2020 BERHAD DIALOG GROUP and Analysis: capabilities against latest IT and cyber Annual Report 2020 BERHAD DIALOG GROUP page 51 threats. 5 STRATEGIES The Group’s business could be exposed Such actions may have a material • The Group has in place contracts and D Diversification across the upstream, F S midstream and downstream sectors to litigation risks by our clients, vendors effect on our financial status and agreements to govern contractual and other parties. operational results. agreements with its customers and R Growing long term Recurring income vendors. Legal I TECH • Continuous review and management of Active recruitment, development and T contractual terms and conditions by the retention of Talent business units to ensure compliance at all Cultivating strong relationships with S S times. Stakeholders • The Group has robust systems in place to Development of proprietary Technology Quality Assurance and TECH Quality Control: manage the quality and accuracy of all its for use in our businesses pages 56 to 57 project activities. OVERVIEW KEY MESSAGES MANAGEMENT DISCUSSION AND ANALYSIS
STRATEGIC ALLIANCES
I S S TECH
62 Annual Report 2020 BERHAD DIALOG GROUP