WorleyParsons: Half Year Results 2011 (Australia)

Professional services company WorleyParsons Limited today announced a net profit after tax for the six months to 31 December 2010 of $128.6 million, in line with guidance, and a decrease of 6.8% on the $138.0 million net profit reported for the previous corresponding period.

For the six months to 31 December 2010, the stronger Australian dollar had a negative translation impact of $14.1 million compared to the previous corresponding period.

The result was earned on aggregated revenue of $2,916.4 million, an increase of 14.5% and EBITDA of $249.2 million. The EBITDA margin for the company was 8.5%, down from 9.9% in the previous corresponding period due primarily to lower margins in our US operations and the negative impact of foreign exchange. The effective corporate tax rate was 24.4% contributing to a net margin of 4.4% compared to 5.4% in the previous corresponding period.

Basic earnings per share (EPS) were 52.4 cents, a decrease of 7.7% from the 56.8 cents per share reported in the previous corresponding period.

Commenting on the performance for the six months to 31 December 2010, the Chief Executive Officer of WorleyParsons, Mr John Grill, said:

“The second quarter of this financial year has seen improved conditions in a number of our key markets. Project awards in the upstream hydrocarbons sector have been particularly strong, including the QGC LNG upstream facilities project and the recent award by BP for Front End Engineering Design (FEED) and support services for the development of the Rumaila field in Iraq. We continue to see conditions in the Canadian oil sands market improving with stronger results recorded. Our INTECSEA operations also performed well with generally improved conditions in the subsea and deepwater market.

“The focus on the importance of our long term contracts is ongoing and we can report on much success in this area during the first half of the year. Demand for EcoNomics support on major resource and remediation projects has also picked up during the six months in line with the general lift in project activity.

“We have secured a number of integrated ‘pit to port’ projects for our Infrastructure & Environment and Minerals & Metals operations, all of them in the early evaluation and feasibility stages.

“The developing world continues to provide most of the major project opportunities we are undertaking. All of our sectors are making progress in deploying our capability to support these projects and the development of genuine local capability.The completion of the KV3 acquisition in South Africa is another example of our strategy of increasing access to the developing world. We now have over 1,900 staff across Africa and we are in a strong position to support opportunities in this market.

“In line with the improving business climate, we have increased headcount through the second quarter with our personnel numbers now in excess of 32,900 (including KV3 staff).

“The challenging conditions we have experienced over the last 18 months in the United States power and the downstream hydrocarbons sectors continued through this half.

We do however expect some improvement in these markets in the second half. “Our results continued to be negatively affected by the stronger Australian dollar. Our results for the second half will be affected by the recent extensive flooding in Queensland and to a lesser extent by yesterday’s earthquake in Christchurch. The increasing degree of uncertainty across the Middle East and North Africa is of concern with the impact from these developments difficult to estimate at this stage.”

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Source: WorleyParsons, February 23, 2011;