Worley looks to automation after profit drops 78pc

afr.com:

Global engineering group Worley plans to use automation and digitisation to boost profit margins after losses on the sale of a North American business caused annual net profit to slide 78 per cent to $37 million.

Worley, which reported a $172 million net profit a year earlier, took a $240 million loss on the sale of a turnaround and maintenance business in North America, which employed 5,800 people, that it inherited when it acquired Jacobs Engineering Group’s energy, resources and chemicals division for $4.6 billion in 2019.

The company had previously disclosed the loss in its interim results.

However, group underlying earnings, which exclude the loss, rose 16 per cent to $635 million while revenue rose 17 per cent to $11.3 billion.

Worley’s stock rose 54¢, or 3 per cent, in midday trading to $17.92 per share. The shares are trading at their highest levels in almost five years.

Worley chief executive Chris Ashton said sustainability-related revenue – which includes income from gas projects – rose to $4.5 billion, up 41 per cent on a year earlier, representing 41 per cent of the company’s total aggregated revenue.

“Around half of our revenue come from our top 20 customers and of that top 20, 85 per cent have net-zero scope one and scope two commitments by 2050 or sooner,” Mr Ashton said.

While demand for Worley’s services from traditional oil and gas customers is continuing, the company is experiencing faster growth in sustainability-related projects such as carbon capture, low carbon fuels, low carbon hydrogen and battery materials processing, the CEO added. “On the battery materials processing, it’s almost entirely new customers.”

Group earnings margins dropped to 5.8 per cent from 6 per cent with Worley blaming the