Worley (ASX:WOR) share price drops with 50% fall in profits

Falling profits are seeing investors sell their shares in the company.

| More on:
A female construction project manager in a hi vis vest and hard hat considers progress on a chart on the wall.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Worley Ltd (ASX: WOR) share price is tumbling after the company released its full-year results for FY21.

At the time of writing, shares in the energy and chemicals engineering company are trading for $10.97 – down 3.35%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.22% higher.

Let's take a closer look at today's announcement.

Worley share price slumps with 27% plunge in revenue

What happened to Worley in FY21?

As with most other companies, COVID played a disproportionate impact on the Worley share price.

CEO Chris Ashton conceded as much in remarks today:

FY2021 has been a year of dynamic global change. Our business has felt the impact of the global economic circumstances, including COVID-19 as global activity slowed and project sanctioning was deferred. Through this year, we've acted with agility to accelerate our strategic transformation and position our business for future success. These efforts contributed to an improved result in the second half in line with our expectations.

The second half of the year was better for the company financially than the first half of FY21.

What else did management say?

Ashton also said the following:

With reduced revenues, we've managed the elements of our business within our control. Our underlying operating cash flow of $621 million further strengthened our balance sheet with net debt reducing by 13% to $1,556 million and similar to H1 FY2021 is at the lowest levels since the ECR acquisition. Leverage (defined as net debt to EBITDA) has increased to 2.0x and gearing is well below the target range of 25-35% at 21.7%. We aligned our financing with our purpose, delivering a more sustainable world, and successfully issued Australia's first sustainability-linked bond with a €500 million issuance under a Euro Medium Term Note program.

What's next for Worley?

Looking forward, Worley says there are "positive indicators" for FY22, and it expects momentum from H2 FY21 to continue into the new financial year. It attributes this to an "increasing backlog and factored sales pipeline."

Its push into sustainability should produce positive financial results for the company, according to the statement. Let's see what this means for the Worley share price going forward.

Worley share price snapshot

Over the past 12 months, the Worley share price has increased 20.42%. Year to date, however, it is down 4.53%.

Worley has a market capitalisation of $5.9 billion.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Fallers

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Megaport, Pilbara Minerals, Vysarn, and WiseTech shares are falling today

These shares are ending the week in the red. But why?

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Accent, Sayona Mining, Web Travel, and Weebit Nano shares are dropping today

These shares are having a tough time on Thursday. Why are they being sold off?

Read more »

A smartly-dressed man screams to the sky in a trendy office.
Share Fallers

Why Appen, DroneShield, PWR, and Webjet shares are sinking today

These shares are having a tough time on hump day. But why?

Read more »

a car driver sits up and looks alert with wide eyes and an expression of concentration while he holds the wheel of a car.
Share Fallers

Why this ASX All Ordinaries stock just crashed 24%!

Investors are punishing the ASX All Ords company today. Let’s find out why.

Read more »

A male investor wearing a blue shirt looks off to the side with a miffed look on his face as the share price declines.
Share Fallers

Why Elders, KMD, Lovisa, and Telix shares are dropping today

These shares are missing out on the good times on Tuesday. But why?

Read more »

A woman with short brown hair and wearing a yellow top looks at the camera with a puzzled and shocked look on her face as the Westpac share price goes down for no reason today
Share Fallers

Why Life360, Lovisa, NAB, and Resolute shares are falling today

These shares are starting the week in the red. But why?

Read more »

A young woman holds an open book over her head with a round mouthed expression as if to say oops as she looks at her computer screen in a home office setting with a plant on the desk and shelves of books in the background.
Healthcare Shares

This ASX All Ords share is diving 18% as inflation pain draws blood

This healthcare company delivered a trading update at its annual general meeting today.

Read more »

A woman with a sad face looks to be receiving bad news on her phone as she holds it in her hands and looks down at it.
Share Fallers

Why Healius, Opthea, Peninsula Energy, and Wildcat shares are falling today

These shares are having a tough finish to the week. But why?

Read more »