Worley Limited has flagged a significant adverse impact from Middle East conflict to its FY26 financial performance, with estimated underlying EBITA headwinds of $30 to $40 million. This announcement marks a material shift in the company’s earnings outlook and represents a meaningful downgrade from previous guidance provided to the market. The engineering services provider, which maintains substantial operations across the Middle East region, now expects it will be unlikely to achieve underlying EBITA growth in FY26, a notable retreat from earlier projections.
The company attributes the earnings impact to project delays and postponements rather than outright cancellations. While Worley reports that no projects have been cancelled to date, customers have delayed commencement and award of new projects in the region. Existing projects have experienced timeline delays due to safety considerations, supply chain disruptions, and transportation challenges. The company has implemented remote and flexible working arrangements and is utilising its Global Integrated Delivery centers in India and other international offices to continue servicing customers, though the effectiveness of these mitigation measures appears insufficient to offset the broader impact.
The disruption extends beyond Worley’s on-ground Middle East workforce. The company notes that adverse impacts flow through to services provided from its offices outside the Middle East, indicating the conflict’s ripple effects across the global operations. This geographic spread of impact suggests that Worley’s diversified service delivery model, while helpful, cannot fully insulate the business from regional disruption at scale. The extended duration and continued uncertainty around the conflict are presented as ongoing risks rather than near-term issues likely to resolve quickly.
Worley has narrowed its FY26 guidance in some respects while maintaining other parameters. The company continues to expect underlying EBITA margin (excluding procurement) to remain within the 9.0 to 9.5 percent range and still targets higher aggregated revenue growth than FY25. This suggests that while absolute earnings have been revised downward, the company believes it can maintain or improve operational efficiency on deployed capital. The maintenance of margin guidance despite the earnings headwind indicates either successful cost management or an expectation that other business segments will offset Middle East weakness.
Looking ahead, Worley identifies potential growth opportunities in regional pipeline and export infrastructure investment, as well as increased global demand for national security focused alternate sources of energy, chemicals and resources. The company has begun discussions with customers on both immediate repair and rebuild efforts in the region and longer-term strategic responses to conflict impacts. An Investor Day scheduled for 14 May 2026 will likely provide more detailed commentary on these opportunities and revised medium-term guidance.
Investors should monitor the duration of Middle East disruption, any further project deferrals or cancellations, and the pace of customer engagement on reconstruction activities. Quarterly earnings updates will be critical in tracking whether the $30 to $40 million estimate proves accurate or if impacts extend beyond current expectations. This announcement is price sensitive and has been flagged as material by the ASX.
View the full ASX announcement (PDF)
About Worley Limited (ASX: WOR)
Worley Limited is an engineering and professional services company that provides consulting and project delivery expertise to the energy, chemicals, and resources sectors. The company offers services including engineering, procurement, construction, asset performance management, and digital solutions. Worley operates globally across the Americas, Europe, the Middle East, Africa, Australia, Asia Pacific, and China, with headquarters in Sydney, Australia.
If you would like to discuss this announcement or how it might affect your portfolio, request a callback or call us on 1300 889 603.
