Reducing internal costs and improving customer delivery will remain priorities for engineering group WorleyParsons, after the company announced a FY17 half year statutory net loss of $2.4 million after tax.
WorleyParsons boss Andrew Wood said the company had made “substantial progress” on cutting costs, improving customer delivery, and optimising its portfolio in the first half.
The $2.4 million loss was down 110.4% on the first half of last financial year, when WorleyParsons recorded a $23.1 million net profit after tax.
However, with one-off expenses ignored, WorleyParsons reported an underlying profit after tax of $57.1 million in the first half, down just 22.7% year-on-year.
Wood was eager to highlight the changes made in the business over the period.
“Our cost reduction program lowered overheads by $50 million when compared to the immediately preceding six-month period (H2 FY16),” he said.
“Our staff numbers are stabilising and we are achieving our staff utilisation target.”
He also pointed out the company’s work backlog increased from $4.2 billion at the end of June 2016, to $4.7 billion at the end of December.
“During the [first half] we secured 48 significant awards with a total contract value in excess of $1.3 billion,” Wood said.
“Notwithstanding that market conditions remain challenging, customers’ sentiment is improving and they are informing us that their activity levels are not expected to deteriorate further.
“In some areas, they are beginning to increase activity which we expect to flow through in the medium term.
“The benefit of the cost reductions achieved by the company in the first half are expected to be reflected in second half earnings.”
Wood’s confident outlook did little to impress the stock market, however.
After hitting a two-week high of $10.24 a share on Thursday last week, WorleyParsons closed at $8.60 on Monday, February 20, following the release, and sunk further to close at $8.16 a share on Tuesday.
The board did not declare an interim dividend.