A rare event this reporting season for one lot of shareholders in the shape of a big rise in interim dividend.
That’s what holders of scrip in Worley, the energy, chemicals, and resources engineering company will see after the company reported a 40% jump in interim net profit to $115 million yesterday thanks to improved market conditions and a boost from its Jacobs Engineering (ECR) acquisition 10 months ago.
Worley doubled its interim dividend to an unfranked 25 cents a share.
Directors also held out the prospect that it will be able to wring more savings from its $US3.2 billion acquisition of Jacobs Engineering in April of last year.
“We have increased our cost synergy target to $175 million per annum, delivered over 30 months from completion,” new CEO, Chris Ashton said in Monday’s release.
Mr. Ashton said the company had been focused on delivering the benefits of the ECR acquisition at a cost of $81 million in the first half.
Worley’s initial estimate was about $130 million to $150 million in cost savings from after the merger.
There will be a one-off cost of about $125 million for delivering the synergy target, plus capital expenditure of $15 million, Worley said on Monday.
There will also be modernisation costs of about $40 million and $35 million capital expenditure associated with that.
Mr. Ashton said Worley was seeing more consistent earnings through increased exposure to operational expenditure and the chemical sector against a background of improved market conditions.
Revenue more than doubled to $5.99 billion since the Jacobs businesses were merged with the old Worley Parsons operation to create a group that employs close to 60,000 people in 51 countries.
The shares dipped 1.6% to $13.85 which wasn’t a bad performance given the 2.3% slump in the wider market.
