Worley share price surges as FY22 revenue reaches $9.7b

The energy engineering giant saw its revenue rise in FY22, and it expects the metric to continue growing.

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Key points

  • The Worley share price is up 6% in Wednesday morning trading to $14.90
  • Its rise follows the release of the company's financial year 2022 earnings
  • Worley posted $9.7 billion of revenue and a net profit after tax and amortisation of $243 million

The Worley Ltd (ASX: WOR) share price is well in the green after the S&P/ASX 200 Index (ASX: XJO) energy engineering giant released its full-year earnings.

The stock is currently trading 5.9% higher at $14.90 a share, after opening 0.9% higher at $14.20 this morning.

Worley share price gains as after-tax profit reaches $172m

Here are the key takeaways from Worley's statutory financial year 2022 (FY22) earnings:

  • Aggregated revenue came to $9 billion – a 3% increase on that of the prior corresponding period (pcp)
  • Meanwhile, revenue and other income lifted 2% to $9.7 billion
  • Earnings before interest, tax, and amortisation (EBITA) lifted 41% to $449 million
  • Net profit after tax (NPAT) and amortisation rose 55% to $243 million
  • Basic earnings per share (EPS) surged 109% to 32.8 cents
  • Declared 25 cent, unfranked final dividend, bringing its full year payout to 50 cents – flat with that of FY21

Looking to the company's underlying earnings, it reported underlying EBITA of $547 million – an 18% improvement – and an underlying after-tax profit of $329 million – a 19% increase.

Its underlying basis EPS came to 62.8 cents – an 18% year-on-year increase.

The company also improved the quality of its earnings, with 35% of its total revenue – $3.2 billion worth – coming from sustainability activities.

Worley's operating cash flow, however, fell 41% to $316 million

What else happened in FY22?

The major news from Worley in FY22 was its withdrawal from Russia. The company announced its plan to remove its services from the nation after Russian forces invaded Ukraine.

The Worley share price gained 25.6% over the course of FY22, closing the fiscal year at $14.37.

What did management say?

In a letter to shareholders, Worley CEO and managing director Chris Ashton said:

These results are indicative of continued market expansion in both our traditional and sustainability related work. We have delivered an improved result against a backdrop of geopolitical and economic challenges. This is a direct result of the changes we've made to our business. We've set up a scalable business, and we're delivering ongoing benefits from our cost‑saving programs.

What's next?

The company expects its average FY22 underlying EBITA margin – 6% – to be sustained in FY23. Meanwhile, it's seeing indicators that point to improving revenue.

Sustainability-related work now accounts for 50% of its factored sales pipeline, placing it in a leadership position for the energy transition. It's also investing $100 million in organic growth over three years to boost its sustainability solutions, digital enablement, and process technology.

Worley also boasts a $15.4 billion backlog.

Worley share price snapshot

It's been a good year so far for the Worley share price.

The stock has lifted 37% since the start of 2022. It's also trading 29% higher than it was this time last year.

For comparison, the ASX 200 has slipped 6% year to date and 7% over the last 12 months.

Motley Fool contributor Brooke Cooper 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 Scott Phillips.

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