Engineering and project management firm WorleyParsons says the slump in activity among its customers, which caused revenue to plunge by 35 per cent and pushed the company to a first-half loss, may have bottomed out.
Engineering and project management firm WorleyParsons says the slump in activity among its customers, which caused revenue to plunge by 35 per cent and pushed the company to a first-half loss, may have bottomed out.
WorleyParsons reported a first-half net loss of $2.4 million this morning, compared to a $23.1 million profit a year earlier.
Stripping out restructuring costs and other one-off items, underlying profit fell 22.7 per cent to $57.1 million.
WorleyParsons' revenue for the six months to December 31 dropped by 35 per cent to $2.72 billion, reflecting the decline in the hydrocarbons; infrastructure; and minerals, metals and chemicals sectors.
Chief executive Andrew Wood said the company did not expect activity to decline further.
"Notwithstanding that market conditions remain challenging, customers' sentiment is improving, and they inform the company that their activity levels are not expected to deteriorate further," he said.
"In some areas, they are beginning to increase activity which we expect to flow through in the medium term."
Mr Wood said the company had cut overheads by $50 million in the first half, and the benefits are expected to be reflected in second-half earnings.
"We have made substantial progress on our priorities of reducing internal costs, improving customer delivery and optimising the portfolio," Mr Wood said.
Shares in WorleyParsons were $1.645, or 16.7 per cent, lower at $8.215 at 11am.
In the first half, WorleyParsons' revenue fell as projects were completed or customers delayed them amid difficult market conditions.
The group's biggest sector of operations, hydrocarbons, reported a 33.3 per cent fall in revenue to $1.5 billion.
WorleyParsons said it is pursuing opportunities to expand in the attractive sectors of chemicals, new energy and renewables.
The group is also investing in prospective markets, including Saudi Arabia and China.
