WorleyParsons Acquisitions, Sales Boost Second-Half Profit 46%

By Jason Scott

Aug. 12 (Bloomberg) -- WorleyParsons Ltd., Australia's biggest engineering company, posted a 46 percent increase in second-half profit on acquisitions and increased demand from the energy and mining industries.

Net income in the six months ended June 30 climbed to A$190.6 million ($167 million), from A$130.3 million a year earlier, according to Bloomberg calculations derived from the Sydney-based company's full-year results released today. Sales gained 18 percent to A$2.41 billion.

WorleyParsons spent A$246.6 million buying companies this year, including deepwater oil specialist Intec Engineering BV and Canada's Westmar Consultants Inc., to service demand from mining and energy companies. Deepwater offshore oil and gas production is set to jump by 78 percent in the five years to 2011, according to U.K.-based researcher Energyfiles Ltd.

``They're obviously in a very buoyant environment and I expect them to continue to do well,'' said Alexander Mees, an analyst at JPMorgan Chase & Co. in Sydney. ``It's a strong result with lots of growth.''

WorleyParsons rose as much 5.2 percent to A$35.20 in Sydney, and traded at A$34.70 at 11:22 a.m. local time on the Australian stock exchange.

Annual Record

For the year, profit rose 53 percent to a record A$343.9 million, or 140.8 cents a share, from A$224.8 million, or 100.4 cents, a year earlier. The company was expected to earn A$346.9 million, according to the average of 10 analyst estimates compiled by Bloomberg.

Revenue in the year rose to $4.67 billion, up 33 percent. It will pay a final dividend of 47.5 cents a share, a 46 percent increase from last year.

``Positive trading conditions across the group continue and demand for our services remains high,'' Chief Executive Officer John Grill said in the statement. ``Subject to conditions remaining favorable we expect to achieve increased earnings in 2009.'' The company didn't provide a forecast for the year to June 30, 2009.

WorleyParsons said it's looking to sell two power stations, with a book value of A$31.6 million, in Western Australia state.

The company also today announced a study into what it says will be the world's largest solar thermal power plant.

In May, WorleyParsons signed a letter of intent to carry out work on the first phase of Abu Dhabi's $12 billion Chemicals Industrial City, a business park also known as Chemaweyaat. The complex will be the world's largest such facility. In April, it agreed to buy Intec Engineering for $108.5 million to benefit from increased investment in deepwater and arctic oil and gas project development.

Yesterday, the company said it won a A$260 million contract to manage the engineering, procurement and construction for the second part of the Pilbara Iron Ore Infrastructure Project, owned by Fortescue's Pilbara Infrastructure Ltd. It completed work on the first phase of the project this year.

To contact the reporter on this story: Jason Scott in Perth at jscott14@bloomberg.net