In 1975, a young Malaysian working as an engineer with an oil and gas multinational company in Singapore decided to balik kampung in the belief that he could contribute to the country.Ngau Boon Keat then joined the newly set up Petronas — our very own national oil company, whose prospects no one could predict at the time.
The passionate engineer was one of the company’s young Turks who sat at the negotiating table with foreign oil major Shell to structure Malaysia’s first production-sharing contract (PSC) back in 1974. The sealing of the PSC signified the start of a new era for Malaysia’s oil and gas industry. It not only benefited Malaysia in terms of oil revenue but also enabled the quick transfer of technology and development of the domestic oil and gas industry’s ecosystem.
Now a Tan Sri and aged 70, Ngau has not looked back since.
His stint in Petronas was disrupted in 1980 when he had to take over his late father’s timber business. But the call of his previous field was too strong and four years later, Ngau formed a small oil and gas service provider called Saga Holdings with three partners.
In 1996, it was listed on Bursa Malaysia as Dialog Group Bhd and today, it is one of the biggest integrated oil and gas service providers in the region. Dialog is also one of the pioneer investors in Pengerang, Johor, where it owns and operates petrochemical, oil and LNG storage terminals and a deep-sea port.
Dialog’s market capitalisation today is around RM18 billion, up fivefold from RM3.6 billion in 2010.
And its rise has been steady, growing from its inception in 1984 as an integrated technical service provider to an owner and operator of upstream marginal and mature oilfields, and strategically located storage facilities, and an offshore supply base.
Dialog now has a staff strength of 2,500 and offices in Malaysia, Singapore, Thailand, Indonesia, China, Australia, New Zealand, Saudi Arabia and the United Arab Emirates.
And what a ride it has been for Ngau, who was appointed to Dialog’s board in November 1990 and owns about 20% of the company.
To put things in perspective, if you had invested in 1,000 Dialog shares in its initial public offering at RM2.75 apiece in 1996, and had participated in the company’s 2-for-10 rights issue at RM1.20 each and converted the 8,809 free warrants at RM1.19 each, your investment would have grown into 230,864 shares (also taking into account seven bonus issues and three rounds of share dividends).
The market value of 230,864 shares is RM724,912 (based on the stock’s closing price of RM3.14 on Dec 13) compared with the total investment cost of RM45,024 — a return of 16 times in 22 years. Not many could match this feat.
While most of the oil and gas companies were ravaged by the meltdown in oil prices in the past 10 years — plunging from US$146 per barrel in July 2008 to a low of US$28 in January 2016 — Dialog bucked the trend, growing steadily.
In the last 10 years the company’s profit after tax has grown more than fivefold, from RM102 million in FY2009 to RM528 million in FY2018. Revenue growth has been just as spectacular, rising from RM1.1 billion in FY2009 to RM3.1 billion in FY2018.
Its return on equity in the past 10 financial years has been between 13% and 29% while shareholders’ funds strengthened from RM441 million in FY2009 to RM3.5 billion in FY2018.
Dialog’s dividend payments have also increased, from RM62 million in FY2009 to RM180 million in FY2018. The company has been consistently paying out 40% of its profit to its shareholders.
Also testament to Ngau’s leadership is Dialog’s war chest of RM1.16 billion cash and reserves of RM1.95 billion as at end-September this year. Long-term borrowings stood at RM1.24 billion while short-term debts amounted to RM364.52 million.
Dialog incurred less than RM12 million in finance costs in its financial quarter ended Sept 30, an amount that is relatively small compared with that of its debt-laden oil and gas peers.
It is noteworthy that Dialog, in the statement accompanying its financial results, says, “As a leading integrated technical service provider that is diversified across the upstream, midstream and downstream sectors in the oil, gas and petrochemical industry, Dialog remains confident that its business model is well structured to manage oil price volatility and currency movements.”
Thus, it does not come as a surprise that other than Ngau, there are only a handful of individuals in Dialog’s list of top 30 shareholders; the bulk of its shares is held by institutional investors.
Apart from Ngau, who has 20.03% equity interest, the other substantial shareholders in the company include the Employees Provident Fund with 7.68% equity interest and Kumpulan Wang Persaraan (Diperbadankan) with 6.84%. Other notable shareholders are Vanguard Emerging Markets, GIC Private Ltd for the government of Singapore and insurance outfit AIA Bhd.
Other than driving Dialog, Ngau is also the founder of the MyKasih Foundation, a non-profit organisation that provides food aid, health awareness and financial literacy programmes, children’s education and skills training programmes to less fortunate Malaysians.
At the heart of the foundation is a cashless system developed by DIV Services Sdn Bhd, a subsidiary of Dialog. Since its inception in 2009, MyKasih has distributed as much as RM240 million to 260,000 underprivileged families all over the country. The donors’ list includes big names from Corporate Malaysia and individuals kind enough to share their fortunes.
People close to Ngau say that despite his accomplishments, he prefers to keep a low profile, focusing on doing the right things — the important things — in life.