Worley faces earnings freeze

SHARES in WorleyParsons slumped Friday after the company said weakness in the Western Australian market had put a damper on its outlook, telling investors to expect earnings to head backwards.

James McGrath

It told the market on Friday that as a result of clients deferring projects in WA, it would most likely chalk up earning of $320-$340 million for the 2013 financial year, compared with the $345.6 million it managed to squeeze out of the 2012 financial year.

It said a demand from its resources sector clients had waned as projects were deferred and companies started to buckle down on costs.

It said this attitude had hit its Infrastructure & Environment, and Minerals, Metals, and Chemicals business especially hard.

In addition, it said that it had been hit by weakness in the Canadian oil sands market, which would not “achieve the growth previously expected”

Despite being hit in WA and Canadian oil sands, Worley pointed to operations in other markets, including China and Brazil, as being the saving grace of its growth.

Putting on a brave face, Worley chief executive Andrew Wood said its diversity would get it through the storm.

"The diversity of our business in terms of its geography, industry sector and service offering is a fundamental driver of this confidence. While Western Australia and WorleyParsonsCord have underperformed, a number of regions are performing strongly.”

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