Worley (ASX:WOR) share price drops with 50% fall in profits

Falling profits are seeing investors sell their shares in the company.

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The Worley Ltd (ASX: WOR) share price is tumbling after the company released its full-year results for FY21.

At the time of writing, shares in the energy and chemicals engineering company are trading for $10.97 – down 3.35%. The S&P/ASX 200 Index (ASX: XJO), meanwhile, is 0.22% higher.

Let's take a closer look at today's announcement.

Worley share price slumps with 27% plunge in revenue

What happened to Worley in FY21?

As with most other companies, COVID played a disproportionate impact on the Worley share price.

CEO Chris Ashton conceded as much in remarks today:

FY2021 has been a year of dynamic global change. Our business has felt the impact of the global economic circumstances, including COVID-19 as global activity slowed and project sanctioning was deferred. Through this year, we've acted with agility to accelerate our strategic transformation and position our business for future success. These efforts contributed to an improved result in the second half in line with our expectations.

The second half of the year was better for the company financially than the first half of FY21.

What else did management say?

Ashton also said the following:

With reduced revenues, we've managed the elements of our business within our control. Our underlying operating cash flow of $621 million further strengthened our balance sheet with net debt reducing by 13% to $1,556 million and similar to H1 FY2021 is at the lowest levels since the ECR acquisition. Leverage (defined as net debt to EBITDA) has increased to 2.0x and gearing is well below the target range of 25-35% at 21.7%. We aligned our financing with our purpose, delivering a more sustainable world, and successfully issued Australia's first sustainability-linked bond with a €500 million issuance under a Euro Medium Term Note program.

What's next for Worley?

Looking forward, Worley says there are "positive indicators" for FY22, and it expects momentum from H2 FY21 to continue into the new financial year. It attributes this to an "increasing backlog and factored sales pipeline."

Its push into sustainability should produce positive financial results for the company, according to the statement. Let's see what this means for the Worley share price going forward.

Worley share price snapshot

Over the past 12 months, the Worley share price has increased 20.42%. Year to date, however, it is down 4.53%.

Worley has a market capitalisation of $5.9 billion.

Motley Fool contributor Marc Sidarous has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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