The North Sydney-based WorleyParsons Limited (ASX: WOR) provides professional services covering full lifecycle, from creating new assets to sustaining and enhancing operating assets in the hydrocarbons, mineral, metals, power, chemicals, infrastructure sectors. These services comprise delivery of projects, expertise in engineering, procurement, construction as well as consulting an advisory service.
On March 15th, 2019, WorleyParsons signed a five-year framework agreement with Algeria-based Sonatrach for the provision of project management services to supplement Sonatrach’s plan of further developing its oil and gas production capacity in the upcoming years across a couple of important projects. In Algeria, Sonatrach is the leading national oil and gas company that announced its SH2030 strategy for a significant investment program mainly focussed upon the natural resources sector, specifically oil and gas, with an ambitious agenda to become the fifth largest oil company in the world.
Prior to this, the Australia-based Newmont Mining Services Pty Limited awarded a four-year engineering, procurement and construction management (EPCM) services contract to WorleyParsons. The contract further includes pre-commissioning, commissioning as well as performance testing services for Newmont’s underground mine operations underway in Australia’s Tanami Desert. Besides, it will also construct deep shaft and allied infrastructure to supplement the mining production.
Meanwhile, WorleyParsons announced to have received regulatory approvals from the European Commission and the Canadian Competition Bureau for the acquisition of the Energy, Chemicals and Resources division of Jacobs Engineering Group Inc (Jacobs ECR). On October 22nd, 2018, the two parties entered into a binding agreement for Jacobs ECR, which is still awaiting regulatory approvals in South Africa and completion of certain restructuring within Jacobs.
On December 3rd, 2018, the US HSR antitrust clearance was received by WorleyParsons. However, the Joint Voluntary Notice seeking CFIUS approval of foreign investment in the USA, submitted in December, is still under review facing delays due to the recent partial shutdown of USA government.
The acquisition is scheduled to be closed by March/April 2019 tentatively and bring immense benefits to WorleyParsons shareholders as announced. The total consideration for the transaction is around AUD 4.6 billion, funded by AUD 2.9 billion of an entitlement offer, AUD 985-million stock issued to Jacobs on completion and new debt. On completion, WorleyParsons would be employing as many as 57,600 people across 51 nations, offering sector leadership globally in Hydrocarbons, Chemicals, Minerals and metals sector, through which it will bring significant value upside through cost and revenue synergies.
For the half-year ended December 31st, 2018, the company revealed impressive financial results with the statutory net profit after tax (NPAT) rising from $ 1.4 million to $ 82.4 million with the aggregated revenue also up by 11.1% to $ 2.57 billion due to better market scenario. Besides, the underlying EBIT was also up 17.6% to $ 156.3 million. Due to extensive foreign exchange fluctuations, the net debt increased to $ 783.9 million, up from $ 662.5 million as at June 2018.
To date, the company’s market cap stands at AUD 6.75 billion and the WOR stock price closed the day’s trading session at AUD 14.590, down 0.41% on Friday, March 15th, 2019.
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