WorleyParsons Holds Off on Dividend Despite Profit Increase

By Robb M. Stewart Features Dow Jones Newswires

MELBOURNE, Australia--WorleyParsons Ltd. (WOR.AU) will continue to hold off paying a dividend despite a rise in its annual profit as the engineering and construction contractor cautioned conditions remain challenging for its customers despite a recent lift in activity.

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Net profit jumped 43% to 33.5 million Australian dollars (US$26.5 million) in the 12 months through June from A$23.5 million the year before, the Australian company said Wednesday. Stripping out one-time items, earnings before interest and tax were little changed at A$129.6 million, a rise of 0.5% on the year before.

Revenue for the year was 33% lower at A$5.22 billion from A$7.79 billion.

WorleyParsons, which scrapped its dividend last year as part of its efforts to strengthen its balance sheet, said its board had opted not to pay a final dividend.

"Demand for energy and resources continues to increase, while investment to meet that demand into the future has declined significantly in recent years," Chief Executive Andrew Wood said. "However, many of our customers are now indicating that they are returning to modest capital and operational expenditure growth, albeit in an environment of uncertainty."

The company has been restructuring its business to offset weaker spending by cash-strapped mining and energy companies, which have pared spending on exploration and relied less on contractors.

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Late last year, WorleyParson rejected as too low an approach from privately-held Dar Al-Handasah Consultants Shair & Partners Ltd. The Dubai-based company in February said it had built up a more than 13% interest in WorleyParsons, through a mix of shares and equity swaps, but said it had no intention at that time to launch another takeover bid.

The company said its work backlog had increased in value to A$5.1 billion by the end of June from A$4.2 billion a year earlier.

Write to Robb M. Stewart at robb.stewart@wsj.com

(END) Dow Jones Newswires

August 22, 2017 20:57 ET (00:57 GMT)