MARKETS

Worley's shrinking Australian ties

ENERGY services player WorleyParsons is eyeing $1 billion of work in North America as its hopes in Australia fade.

Blair Price
Worley's shrinking Australian ties

Macquarie Private Wealth has slapped an outperform rating on the company based on its growth plans in North America over the next few years with stronger profit margins expected.

“Worley is tracking $1 billion of major projects in North America (across chemicals, pipelines, upstream oil and gas) as well as emerging opportunities in Columbia, Mexico (downstream, pipelines),” MPW said.

The broker further said Worley was seeing a shift back towards engineering, procurement, and construction management work in the North American petrochemical space as “as order books fill up and labour markets tighten”.

“This should favour Worley’s lower risk approach, which admittedly has seen others win more US petchem work in the last 1-2 years.”

The Australian Financial Review reported that Worley’s Australian work had dried up.

“Despite seven huge liquefied natural gas projects being developed in Western Australia and Queensland, there are no new projects approved due to the high cost of doing business in Australia,” the newspaper reported.

Worley chief financial officer Simon Holt revealed more at the Bank of America Merrill Lynch investor conference in New York last week.

“Australia has come off some really big projects and there is still some huge construction going on there,” Holt said.

“But our earnings are greatest through the detailed design process and there are no new large projects that we can see in the future there.

“We’re predominantly a North American business rather than an Australian company.”

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