Worley well positioned to benefit from oil price recovery
Many investors would be surprised to hear that the once mighty WorleyParsons (ASX:WOR) has fallen back into the S&P/ASX Small Ordinaries Index following the global oil price rout that hit WOR’s earnings hard and left the balance sheet over geared. Nevertheless, extensive due diligence has convinced us that management is in the early stages of turnaround, which will be largely driven by extensive cost out and a working capital unwind which we expect will significantly de-lever the balance sheet over the coming 12 months. WOR remains a quality business with a solid reputation across the hydrocarbons, minerals, metals, chemicals and infrastructure sectors. New CFO, Tom Honan, and Bain Consulting are embarking on a credible strategy that we expect will strengthen the balance sheet and leave the company well positioned to benefit from the recovery in the oil price that is already underway.
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