WorleyParsons (WOR) News

Submitted by Jim Thesiger on 18 June, 2008 - 11:22

WorleyParsons (WOR) has no changes to their valuation or share price target and retained their Buy rating from Australian market analyst UBS.

WorleyParsons (WOR) Wins Canadian Refining Contract

C$800m Contract:

WOR subsidiary Colt has announced that it has won a C$800m EPCM contract with Consumers Cooperative Refineries Ltd (CCRL) as part of its C$1.9b expansion of a refinery in Regina, Saskatchewan. We would expect revenue to WOR to be around C$80m over the four year life of the project.

Canadian Operations Continue to Win Projects:

Over the past few months Colt has won a number of relatively large, long duration projects. Including this announcement we estimate that total revenues from Canadian contracts over the past nine months amount to some C$500m. Colt generated C$735m in sales in the year to January 2007.

Margins Generally Higher:

In the year ended January 2007 Colt generated EBIT margins of 13%, some 400bps higher than those generated by Worley. We expect Colt to generate C$180m EBITA this financial year, continuing it's historic near 50% growth rate.

Valuation

There are no changes to our valuation or share price target. Compared to its global peers WOR has higher growth rates, better returns on capital a similar or lower multiples. We retain a Buy rating.

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