Revenue Slip Poses Questions as Worley Boosts Profit and Holds Dividend
Worley Limited reported a mixed FY2025 with a slight revenue decline but strong profitability gains and a stable dividend, signaling resilience in engineering services.
- 5% decrease in statutory revenue to $11.24 billion
- 19% increase in EBITA to $823 million
- 35% rise in basic earnings per share to 77.6 cents
- Final unfranked dividend maintained at 25 cents per share
- Operating cash flow and net assets per share showed modest improvements
Mixed Revenue but Strong Profitability
Worley Limited’s financial results for the year ended 30 June 2025 reveal a nuanced performance. While statutory revenue slipped 5% to $11.239 billion, the company posted a notable 19% increase in earnings before interest, tax, and amortization (EBITA), reaching $823 million. This divergence suggests that Worley has managed to enhance operational efficiency and profitability despite top-line pressures.
Earnings Per Share and Margins Gain Ground
Basic earnings per share surged 35% to 77.6 cents, reflecting improved bottom-line results and likely benefiting shareholders directly. The EBITA margin on aggregated revenue held steady at 6.8%, indicating consistent profitability relative to the company’s adjusted revenue base. Underlying EBITA margin, which excludes procurement revenue at margin, remained stable at 6.0%, underscoring the core business strength.
Dividend Stability Signals Confidence
Worley’s board declared a final unfranked dividend of 25 cents per share, matching last year’s payout and bringing total dividends for FY2025 to 50 cents per share. This decision to maintain dividends despite revenue softness signals management’s confidence in the company’s cash flow and ongoing earnings power. Operating cash flow improved slightly to $409 million, supporting the dividend sustainability.
Balance Sheet and Asset Position
Net assets per share increased to $11.00 from $10.42 the previous year, reflecting a modest strengthening of the company’s balance sheet. Net tangible liabilities per share improved slightly, indicating a cautious approach to leverage and asset management. These metrics provide a reassuring backdrop for investors focused on financial stability.
Looking Ahead
While the revenue decline may raise questions about market conditions or project timing, Worley’s ability to grow profitability and maintain dividends suggests resilience. The exclusion of one-off items from prior years related to historic services in Ecuador helps clarify the sustainable earnings picture. Investors will be keen to see how Worley navigates the evolving engineering and construction landscape in the coming year.
Bottom Line?
Worley’s FY2025 results balance revenue challenges with strong profit growth and steady dividends, setting the stage for cautious optimism.
Questions in the middle?
- What factors contributed to the 5% revenue decline despite profit growth?
- How will Worley sustain margin improvements amid potential market headwinds?
- What is the outlook for procurement revenue and its impact on future earnings?
