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WorleyParsons Awarded an EPCM Contract By Newmont

  • February 01, 2019 05:55 PM AEDT
  • Team Kalkine
WorleyParsons Awarded an EPCM Contract By Newmont

Australian engineering company WorleyParsons Limited (ASX: WOR) has been awarded an engineering, procurement, and construction management services contract (EPCM) by Newmont Mining Services Pty Limited in Australia. Following this news, the share price of the company increased by 1.657% as on 1 February 2019.

According to the contract, the company will provide the EPCM services including pre-commissioning, commissioning, start-up and performance testing services for Newmont’s underground mine operations located in the Tanami Desert in the Northern Territory of Australia. The duration of this EPCM contract is four years. As per the announcement, the Contract will establish deep shaft and related mining infrastructure to increase mining production at the mine.Â

While commenting on the EPCM contract, the company’s CEO Mr. Andrew Wood told that the company is looking to continue its successful relationship with Newmont and supporting the further development of the Newmont Tanami operation.

The company has also provided an update on the acquisition of Jacobs ECR. The acquisition was announced in October 2018 when the company entered into a binding agreement to acquire Jacobs Engineering Group Inc.’s Energy, Chemicals and Resources division.

As previously announced, the company has received US HSR antitrust clearance on 3 December 2018. The company has informed that it has received regulatory approval from the European Commission and the Canadian Competition Bureau. The acquisition is subject to the completion of regulatory approval in South Africa and certain pre-completion restructuring activities within Jacobs.

The company has submitted a Joint Voluntary Notice for the CFIUS approval of foreign investment in the USA. The review is underway, and it has been delayed due to the recent USA Government partial shutdown.

As per the announcement, the acquisition is expected to complete in late March or April 2019. After the completion of the acquisition, the company will employ around 57,600 people in 51 countries, providing global sector leadership across Hydrocarbons, Chemicals, and Minerals & Metals. The acquisition is expected to bring significant value upside through cost and revenue synergies.

Earlier on 18 January 2019, the company was awarded EPC contract by Encana Corporation. Under the contract, the company is going to provide engineering, procurement, fabrication and construction services for the Pipestone Processing Facility in Alberta Canada.

In FY 2018, the company reported an underlying net profit after tax (NPAT) of $171.4 million which was 39.1 percent higher than the 2017 underlying result. In FY 2018, the company delivered a positive operating cash flow of $259.7 million and reported a gearing ratio of 23.0%. During the year, the company’s aggregated revenue increased by 8.5% to $4,749.2 million as compared to the previous corresponding year.

In the past six months, the share price of the company decreased by 20.37 percent as on 31 January 2019 and traded at a PE multiple of 59.570x. WOR’s shares traded at $14.110 with a market capitalization of circa $6.4 billion as on 1 February 2019. It has 52 weeks high of $20.028 and 52 weeks low of $10.720 with average trading volume of ~3,518,768.


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