Worley Limited

This report is an updated version of the report published on 9 May 2025 at 11:12 AM AEST.  

Section 1: Company Overview, Low Carbon Emission Initiatives and Fundamentals

Section 1.1: Worley Limited (ASX: WOR) is an Australia-based solutions provider for a diverse range of end markets in energy, chemicals, and resources. It provides data-driven and technology-driven solutions at every stage of the project lifecycle. Kalkine’s Low Carbon Research Report covers the Investment Highlights, Low Carbon Emission Initiatives, Key Financial Metrics, Risks, and Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

Section 1.2: Why Low Carbon Emission Matters?

The shift toward a low-carbon economy is one of the most significant challenges of current time, spurred by the urgent need to combat climate change and reduce the environmental impact of corporate activities. This report covers ASX-listed low-carbon emission company, Worley Ltd (ASX: WOR), that is committed to sustainability and responsible environmental practices.

Carbon and Waste Management - Key Metrics

Worley has achieved a reduction in both carbon emissions and energy intensity per million in revenue between 2020 and 2024, driven by its sustainability strategy and decarbonization initiatives. Total CO₂ emissions intensity fell by 42% while energy intensity dropped by 35% over the period, supported by key actions such as switching to renewable energy through Renewable Energy Certificates, upgrading facilities with energy-efficient LED lighting, electrifying and hybridizing its vehicle fleet, and improving energy productivity by 80% from the 2020 baseline. These improvements reflect Worley’s focus on embedding sustainability into operations, enhancing energy efficiency, and shifting towards a growing portfolio of sustainability-related projects.

Peer Comparison: Carbon Emission and Waste Management Metrics

Worley stands out among its industrial peers with a relatively ambitious emissions reduction target of 65% by 2025, compared to an industry range of 10% to 100%. Its total reported CO₂ equivalent emissions of 57,423 tonnes is moderate within the sector, reflecting its global operations and project footprint. This progress is underpinned by key drivers such as Worley’s transition to renewable energy through Renewable Energy Certificates, energy efficiency upgrades including LED retrofits, and electrification of its vehicle fleet, which have collectively reduced Scope 1 and 2 emissions by 66% from the 2020 baseline. While Worley’s waste recycling ratio of 26.77% is lower than several peers, ongoing initiatives like embedding sustainability in project delivery and supplier engagement aim to improve circularity and waste outcomes. Overall, Worley’s proactive decarbonization strategy, early target year (2025), and integration of sustainability across operations position ahead of many peers in climate action, even as opportunities remain to further enhance waste management performance.

1.3 The Key Positives, Negatives, Investment Highlights, and Risks

1.4 Top 10 Shareholders:

The top 10 shareholders together form ~30.62% of the total shareholding. Grill (John Michael) and The Vanguard Group, Inc. hold maximum stakes in the company at ~6.49% and ~5.06%, respectively.

1.5 Key Metrics: WOR's asset turnover ratio in H1FY25 was 0.53x, higher than the industry median of 0.44x. Below are captured other metrics:

Section 2: Business Updates, Financial and Operational Highlights

2.1 Recent Business Updates:

2.2 H1FY25 Results Highlights

Section 3: Key Risks and Outlook:

Section 4: Stock Recommendation Summary

4.1 Price Performance and Technical Summary

The stock price has declined by ~13.01% in the last three months, whereas over the last six months, it has corrected by ~13.61%. The stock has a 52-week low and 52-week high of AUD 11.070 and AUD 15.810, respectively, and is currently trading below the mid-points of its 52-week low and 52-week high. WOR was last covered in a report dated ‘2 April 2025’.

4.2 Fundamental Valuation

Valuation Methodology: P/E Multiple Based Relative Valuation (Illustrative)

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 9 May 2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Dividend Yield may vary as per the stock price movement.

Note 5: Kalkine reports are prepared based on the stock prices captured either from REFINITIV or Trading View. Typically, REFINITIV or Trading View may reflect stock prices with a delay which could be a lag of 25-30 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice. 

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.