Worley profit lifts after Jacobs takeover

Contractor Worley’s half-year profit rose 110pc on improved market conditions and the inclusion of the Jacobs energy business.

Contractor Worley has lifted its half-year net profit by 110 per cent on improved market conditions and the inclusion of the Jacobs energy business, as new chief executive Chris Ashton takes over the top job.

Underlying net profit rose to $216m from $103m while on a statutory basis profit rose 40 per cent to $115m.

Worley has boosted synergies from its $4.6bn takeover of Jacobs Engineering to $175m a year from $150m previously and said it was seeing less volatility as its revenue mix changes.

The giant Jacobs deal has bulked up Worley but also handed the company a much broader revenue sweep less prone to the booms, busts and spending pullbacks that can make the energy industry highly volatile.

Energy and chemicals now account for roughly even portions of Worley’s global earnings, with oil and gas at 47 per cent and chemicals at 43 per cent.

“In line with the Jacobs investment case, we are seeing more consistent earnings through increased exposure to operational expenditure and the chemical sector. This is occurring on a background of strengthened market conditions,” Mr Ashton said.

Revenue rose 134 per cent to $6bn from $2.6bn while underlying earnings more than doubled to $366m compared with a $353m estimate from Credit Suisse. An interim dividend of 25c per share will be paid, double last year’s payout.

Former boss Andrew Wood officially stepped down on Monday after a seven year stint as Mr Ashton, the company’s chief operating officer, took over Worley’s top job.

Mr Ashton, a 20-year veteran of the engineering firm, has been responsible for integrating last year’s blockbuster takeover of Jacobs, which doubled the size of the company.

He is only Worley’s third chief executive after Mr Wood took on the top role in 2012 from John Grill, the company founder and now chairman.

Former Dow Chemical boss Andrew Liveris, a director of Worley, was named deputy chairman of the resources contractor while Mr Grill has committed to stay in his role until at least October 2022.

Australia’s former top bureaucrat, Martin Parkinson, has also been appointed a director of Worley.

Worley noted Mr Parkinson created Australia’s first Department of Climate Change in 2007 and a national emissions training scheme.

The stock is down 7 per cent in the last year compared with a 15 per cent rise in the S&P/ASX 200.