Dollar drags WorleyParsons profit

Release Date: 2011-02-23

The first-half profit of Australian engineering contractor WorleyParsons fell 6.8% as the company looked to the second half for a stronger market.

Company net profit for the six months to 31 December 2010 fell to A$128.6 million ($128.9 million) from A$138 million in same period, a reduction the company blamed on a A$14.1 million loss caused by a stronger Australian dollar.

Revenue rose 12.1% in the half to A$2.8 billion while earnings before interest, tax, depreciation and amortisation was down A$3 million or 1.2% to A$249.2 million.

In an announcement following the results, company chief executive John Grill said tight margins and a strong Australian dollar had made the first half “challenging”.

"Based on stable currency markets and market conditions remaining positive, we expect to report increased earnings for the full year," he said.

A number of projects had been awarded to WorleyParsons in the second quarter, Grill said, including Front End Engineering Design and support services contract for the development of BP’s Rumaila field in Iraq.

“The developing world continues to provide most of the major project opportunities we are undertaking,” Grill said.

“The challenging conditions we have experienced over the last 18 months in the United States power and the downstream hydrocarbons sectors continued through this half. We do however expect some improvement in these markets in the second half.”

Grill added that flooding in Queensland and yesterday’s earthquake in Christchurch would have some effect on the Australian and New Zealand business while unrest in the Middle East and North Africa was of concern.

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