Worley Revises FY26 Outlook with $30-40 Million Impact from Middle East Conflict
Worley Limited reveals the ongoing Middle East conflict is causing significant project delays and an estimated $30 to $40 million hit to FY26 underlying EBITA, prompting a revision to its growth outlook.
- Middle East conflict delays projects, no cancellations yet
- FY26 underlying EBITA impact estimated at $30-40 million
- Growth in EBITA for FY26 now unlikely despite margin targets
- Customers delaying new project awards amid supply chain issues
- Medium-term growth linked to pipeline infrastructure and energy security
Middle East Conflict Hits FY26 Earnings
Worley Limited (ASX:WOR) has quantified the financial toll of the ongoing Middle East conflict, estimating a $30 to $40 million adverse impact on its FY26 underlying EBITA. While no projects have been cancelled, the company is grappling with delays and disruptions that are forcing customers to postpone new project awards. This has led Worley to revise its previously optimistic growth outlook for the year, now deeming growth in EBITA unlikely.
The conflict’s ripple effects extend beyond the region, impacting Worley’s global operations, including its Global Integrated Delivery centres in India and other offices outside the Middle East. Remote working arrangements and flexible service delivery have been implemented to mitigate disruptions, but supply chain and transportation challenges continue to delay project timelines.
Operational Adjustments and Customer Support
Despite these headwinds, Worley is actively supporting customers with restoration and strategic projects linked to the conflict, aiming to ensure business continuity and facilitate repair and rebuild efforts. The company emphasises that the safety and wellbeing of its people remain paramount, with established security and risk management protocols firmly in place.
However, the extended duration and uncertainty of the conflict are prompting a cautious stance among customers, who are delaying commencement and award of new projects. Worley’s management now expects underlying EBITA margin (excluding procurement) to hold steady within the 9.0-9.5% range, and still targets revenue growth exceeding FY25 levels, though actual outcomes remain contingent on how the geopolitical situation evolves.
Growth Prospects Amid Geopolitical Risks
Looking beyond the immediate turmoil, Worley identifies medium to long-term growth opportunities in investment around regional pipeline and export infrastructure, as well as an increased global focus on national security concerning alternative energy, chemicals, and resources. These sectors could prove pivotal as countries reassess energy strategies in response to geopolitical instability.
This update follows Worley’s recent success in securing a full green light for a major US LNG expansion project, a strategic area of growth for the company. The CP2 LNG export project in Louisiana, where Worley holds a reimbursable EPC contract, underscores the company’s ongoing engagement in critical global energy infrastructure despite regional challenges.
Worley plans to provide further market updates as the situation develops and will hold its Investor Day on 14 May 2026, where it is expected to elaborate on its strategic response to these unfolding geopolitical risks.
Bottom Line?
Worley’s FY26 earnings face pressure from Middle East instability, but pipeline infrastructure and energy security projects offer a potential lifeline.
Questions in the middle?
- How long will the Middle East conflict continue to disrupt Worley’s project pipeline?
- Can Worley’s global delivery centres fully offset regional delays in the near term?
- Will the company’s medium-term focus on energy security translate into meaningful new contracts?
