Worley doubles net profit, says outlook strong for renewables growth

The contracting major says it is making solid progress on its plan to grow its sustainability business to 75 per cent of its total revenue by 2026.

Contracting giant Worley will pay a 25c a share final dividend after doubling its statutory net profit to $172m for the full year, amid a strong growth outlook for its energy business.

Worley said it had taken a $14m hit to its earnings for the year from the company’s exit from its Russian business, primarily the result of severance payments to long-term staff as Worley wound down the business.

But chief executive Chris Ashton said the company’s outlook remained bright as Europe looked for alternatives to Russian gas for energy.

“We are well positioned to meet the opportunities and challenges of the current market. The geopolitical environment is elevating the need for energy independence and security of supply. We’re seeing opportunities in areas such as early phase work in integrated gas and renewable energy sources,” the company said on Wednesday.

“Customer investment in both traditional and sustainability work continues to increase, with sustainability investment growing at a higher rate.”

Worley shares jumped on the news, to close up 6.3 per cent, or 88c each, at $14.95.

Mr Ashton said the company was making “good progress” on expanding its business in renewable energy and other sustainability projects, with saying it had booked $3.2bn of its $9.07bn in revenue – or about 35 per cent – from sustainability-related projects in the full year.

Worley has said it wants 75 per cent of its revenue to come from sustainability projects by 2026.

“We’re winning an increasing number of early phase sustainability related work and we expect these will progress into later project phases with Worley being well positioned to win this work,” Mr Ashton said.

While Worley also includes gas projects in its “sustainability” order book, Mr Ashton told the Australian the company expected to increase its order book in major projects associated with hydrogen production and transportation, along with offshore wind projects, energy storage and transmission lines, and carbon capture infrastructure.

Worley booked revenue of $9.07bn for the full year, and said it had underlying earnings before interest, tax and amortisation of $547m for the year, up 18 per cent.

The contracting major booked net profit of $82m last financial year.

Revenue from Worley’s core energy market business gained slightly to $4.48bn for the yearn, up from $4.39bn, with EBITA in the segment up$28m to $327m.

Its chemicals business booked EBITA of $302m, up from $238m, and its resources business recorded EBITDA of $106m, up from $75m.

While Australian resources projects were hit with a mini-wave of cancellations and deferments earlier this year amid fears inflationary pressure and labour shortages would lead to cost and timeline blowouts, Mr Ashton said Worley’s overseas operations were seeing little sign that inflationary pressures would delay major capital spending, or push wages up to unsustainable levels.

“We are seeing some areas where inflation is higher than we’d like, but in the majority of areas the inflationary pressures on labour costs are less than you might think,” he said.

Originally published as Worley doubles net profit, says outlook strong for renewables growth