WorleyParsons Limited (ASX: WOR) provides professional services through alliance and integrated service contracts to the energy, resource and complex process industries. The Company offers its services to industrial sectors such as oil and gas refining, petrochemicals and chemicals, minerals and metals, power and water and industrial and infrastructure.
The company has recently announced its half year results for the period ended 31 December 2018. As per the report, the company’s business has delivered a statutory net profit after tax (NPAT) of $82.4 million for the six months. On an underlying basis, net profit after tax was $98.4 million, up 25.8% on the previous corresponding period.
The company’s aggregated revenue increased by 11.1% to reach the levels of $2,566.2 million. This rise was on the back of an improved market condition and the inclusion of a full six months of revenue from the UK Integrated Solutions business.
The cash flow from operations was $21.0 million, down from $44.3 million for the prior corresponding period. Excluding the impact of the proceeds from the capital raising, net debt increased to $783.9 million up from $662.5 million at June 2018, with the increase primarily driven by foreign exchange movement. Net debt to EBITDA is 2.1x and gearing is at 25.7%, which is considered to be well within the management’s targeted range between 25%-35%.
The contract backlog has risen to $6.6 billion as of 31 December 2018, an increase of 10.0% from the prior corresponding period. The increased pace of ASX announced awards continued into HY19, providing further indications of improving conditions. The number of those awards received from its customers in the half year was the highest for ten years.
Due to the continued improvement in the market conditions, the company’s resources and energy customers are increasing the needed activity for the infusion of investments. This is being indicated from the recent level of contract awards and the growing pipeline of orders. By maintaining its focus and expanding its position in the resources and energy markets the management expects to deliver improved earnings in FY2019, before including the contribution of the Jacobs ECR acquisition. The company will keep on working upon its cost optimisation objectives, so that operating leverage is achieved as the business grows.
The management expects earnings to be skewed towards the second half of the year, before including the contribution of the Jacobs ECR acquisition. Completion of the acquisition is currently planned for late March/April this year.
Now, let us have a quick look at WorleyParsons Limited’s stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $15.240, trading up by 0.727% during the day’s trade with a market capitalisation of ~$ 6.97 Bn. The counter opened the day at $15.420, reached the day’s high of $ 15.500 and touched the day’s low of $ 15.110 with a daily volume of ~830,878. The stock has provided a Year till Date return of 33.42% & also posted return of -10.47%, 0.80% & 10.20% over the past six months, three & one-months period respectively. It had a 52-week high price of $20.028 and touched 52 weeks low of $ 10.720, with an average volume of 2,925,569 approximately.
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