Key Highlights

  • Underlying NPATA was $395 million, down 16.8 per cent.
  • The decline was attributed mainly to a $58 million impact from Middle East disruption, a slower chemicals market and currency translation.
  • Bookings of $15.5 billion were up 23 per cent.
  • A final unfranked dividend of 25 cents per share was declared, and a $500 million buyback was completed.

Worley Limited (ASX:WOR) reported FY26 results in which Revenue was flat, Earnings fell and the order book rose. What does it mean when an engineering services group reports flat revenue, falling earnings and a rising order book in the same result? For Worley, the answer is timing. In the year to 30 June 2026, the company reported aggregated revenue of $12,023 million, roughly level with $12,050 million in FY25, while underlying earnings before interest, tax and Amortisation (EBITA) fell 10.8% to $734 million. At the same time, bookings rose 23% to $15.5 billion. The result indicates that current profits have been held back by disruption and a soft chemicals market, while new work has been won that management expects to convert into revenue.

The FY26 result

Worley released its results on 26 August 2026. Aggregated revenue, which includes revenue from procurement and from joint arrangements, was up 2.3% in constant currency, but the strength of the Australian dollar reduced the reported figure. Underlying EBITA was down 6.1% in constant currency. Management attributed the decline mainly to a $58 million impact from Middle East disruption, a slower chemicals market and currency translation.

Underlying net profit after tax before amortisation (NPATA) was $395 million, down 16.8%. Statutory NPATA was $306 million, down 35.6%, after $120 million of transformation and restructuring costs, mostly in Western Europe. The EBITA Margin excluding procurement revenue was 9.0%, at the bottom of the company's 9.0% to 9.5% target range. Normalised cash conversion was 93.6%. Cash conversion measures how much of earnings turns into cash, so a figure close to 100% indicates profits are being collected rather than sitting in receivables.

A final unfranked dividend of 25 cents per share was declared. A $500 million buyback was completed and a further $300 million is under way, and the company returned $359 million to shareholders during FY26.

Where the pressure came from

Worley's results by sector and region show how uneven the year was. Energy revenue was $6,373 million, up 8.1%, and resources revenue was $3,282 million, up 5.8%. The mix matters because chemicals is a smaller segment than energy, so growth in energy and resources partly offset the drop. Chemicals revenue fell 22.4% to $2,368 million, reflecting near-term project cancellations. By region, the Americas grew 17.3%, while Europe, the Middle East and Africa fell 11.3% because of Middle East disruption, and Asia Pacific fell 22.0% following the completion of major projects.

Chief executive Chris Ashton said the Middle East conflict and softer market conditions had affected growth in other regions. The company has not indicated that the Middle East work has been lost; its FY27 outlook assumes that delayed projects progress and lift activity in the second half.

The restructuring charges depress statutory profit now. Whether they improve margins will show up in the EBITA margin, currently at the low end of its target band.

Order book and pipeline

Bookings of $15.5 billion were up 23%, and 44% of them were sole-sourced, meaning awarded without a competitive tender. Backlog was reported at $13.8 billion, up 9%. Worley's factored sales pipeline was reported as up 24%, with about half expected to be awarded within 12 months.

Backlog is not revenue.

Sector position and competition

Worley provides engineering, procurement and consulting services to energy, chemicals and resources customers. Its bookings include more than $10 billion in what it calls future-facing markets, such as lower-carbon energy and critical minerals infrastructure, where its pipeline was reported as up 49%. The classification is the company's own.

Competitors include global engineering contractors and a range of regional specialists. Worley depends on customers' Capital spending decisions, which can be delayed or cancelled when Commodity prices, interest rates or geopolitics shift, as chemicals showed in FY26.

FY27 outlook and risks

For FY27, management expects mid to high single-digit growth in both aggregated revenue and underlying EBITA, with earnings weighted to the second half as Middle East volumes recover. It also stated a longer-term ambition of double-digit underlying EBITA growth a year through to FY30. These are guidance and aspirations, not outcomes, and they assume no material deterioration in market conditions.

The main risks are the length and severity of the Middle East disruption, further weakness or project cancellations in chemicals, a more encouraging Australian dollar, and execution of the restructuring. A further risk is that bookings convert to revenue more slowly than expected, given that FY26 saw flat revenue despite encouraging order intake.

Investors tracking the company could focus on several indicators. The first half result for FY27, expected in early 2027, will show whether revenue and margin are heading toward the guidance range. The conversion of backlog and the proportion of sole-sourced work will indicate pricing power. Progress in the Americas, where growth was most encouraging, will show whether it can offset softer regions. Finally, the next steps on the buyback and the presentation currency decision will signal how the board is thinking about capital and reporting.