Further to the announcement dated 25 September 2023, DIALOG Group Berhad ("DIALOG") wishes to announce that its wholly owned indirect subsidiary, Dialog Malic Acid Sdn Bhd, has today obtained DIALOG's Board of Directors' approval to discontinue the undertaking of the engineering, procurement, construction and commissioning of a malic acid project in BASF PETRONAS Chemicals Complex, Gebeng, Kuantan, Pahang Darul Makmur, Malaysia.
Since September 2023, the price of malic acid across Southeast Asia has declined by 20-30%, primarily due to oversupply. In addition, the continued volatility and challenging global chemicals market, and the uncertain macro-economic environment, has led DIALOG to make the strategic decision to discontinue this project. The total capital expenditure incurred to date of RM90.7 million has been written off in the financial quarter ended 31 December 2024. By making this strategic decision, DIALOG will be able to realign its focus back to its core business, positioning DIALOG for long-term growth and resilience.
The discontinuation will affect our earnings in the financial year ending 30 June 2025. However, it is not expected to have any material effects on the net assets, gearing, share capital and substantial shareholders’ shareholding of DIALOG for the financial year ending 30 June 2025.