WOR -9.7%: fell today after increasing the expected earnings impact from Middle East project delays, while also flagging a sizeable foreign exchange headwind from the stronger Australian dollar.
- Middle East EBITA impact: Up to $60m (previously $30m-$40m)
- FX translation impact: ~$50m (2H FY26)
Management said ongoing disruption across the Middle East continues to delay the commencement of new projects and slow progress on existing work, despite recent diplomatic developments. Importantly, there have been no project cancellations, suggesting the issue remains one of timing rather than lost work, though earnings are clearly being deferred.
Adding to the pressure, the stronger Australian dollar is expected to reduce reported FY26 underlying EBITA by around $50m through translation effects.
The update is disappointing in the short term, though we continue to view the issues as largely cyclical/timing related rather than structural. Worley remains leveraged to global energy, infrastructure and industrial investment, and at current valuations we continue to see attractive value once project timing normalises.
MM remains bullish WOR despite today’s set-back
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