Worley Cuts FY26 Profit Outlook as Middle East War Delays $30-40M in Projects
Worley revises FY26 outlook as Middle East conflict extends project delays
Worley has revised its FY26 earnings guidance as the extended duration of conflict in the Middle East continues to delay existing projects and defer new contract awards in the region. The engineering services firm now considers it unlikely to achieve underlying EBITA growth for FY26, with the conflict’s adverse impact estimated at $30 to $40 million. Critically, the company emphasized that no project cancellations have occurred to date, framing the issue as a timing delay rather than permanent revenue loss.
Despite the earnings downgrade, Worley maintained its underlying EBITA margin guidance of 9.0-9.5% (excluding procurement) and continues to target higher aggregated revenue growth than FY25. The company has implemented remote working arrangements and leveraged its Global Integrated Delivery centers in India and other offices outside the Middle East to maintain project continuity where possible.
The announcement, dated 20 April 2026, marks Worley’s second update on Middle East operations within a month, following an initial statement on 25 March 2026. Management noted that customers are delaying commencement and award of new projects in the region, while existing work faces disruption from safety concerns and supply chain challenges.
Actual outcomes may vary depending on factors including the duration of the conflict, supply chain disruption, contract timing, and the pace of regional recovery once conditions stabilize.
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What is underlying EBITA and why does it matter for engineering services firms?
Underlying EBITA refers to earnings before interest, tax, and amortization, adjusted to exclude one-off items such as restructuring charges, asset impairments, or acquisition-related costs. For project-based professional services companies like Worley, this metric provides a clearer view of operational performance than statutory net profit, which can be distorted by non-recurring items and accounting treatments.
EBITA margins reveal how efficiently a company converts revenue into operating profit, a critical measure in the capital-light professional services sector where labour and expertise drive value creation. Worley’s maintained margin guidance of 9.0-9.5% signals that despite project delays, the company expects to preserve operational efficiency and pricing discipline.
The distinction between timing delays and permanent revenue loss matters significantly for investors. When projects are deferred rather than cancelled, future earnings potential remains intact, the work simply shifts to later periods. This preservation of the order book differentiates Worley’s current situation from a structural deterioration in demand.
Operational resilience and emerging opportunities
Worley has activated established security, risk management, and business continuity protocols to support its people and maintain customer service during the conflict. The company’s operational response includes remote and flexible working arrangements where appropriate, with continued services provided through its Global Integrated Delivery centers in India and offices outside the Middle East.
While customers are delaying new project awards and commencement, demand for Worley’s services has not evaporated. The company has been asked to support customers with restoration of assets and strategic projects linked to the conflict, ensuring business continuity and supporting repair and rebuild efforts. This immediate work provides near-term revenue opportunities even as larger capital projects face postponement.
The impact extends beyond Worley’s Middle East offices to services provided to regional projects from its global network, reflecting the interconnected nature of major engineering programs and international supply chains.
Medium-term growth catalysts
Management identified two structural growth opportunities that could emerge over the medium to longer term:
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Investment in regional pipeline and export infrastructure to enhance energy security and supply chain resilience.
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Increased global focus on national security for alternate sources of energy, chemicals and resources, as countries reassess strategic dependencies exposed by the conflict.
These themes suggest potential demand drivers that could materialize as customers respond to geopolitical risks with infrastructure investment and supply chain diversification. Worley noted it continues to engage with customers in the Middle East on repair and rebuild efforts, while speaking with global customers about supporting their strategic response to the conflict’s impact.
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What investors should watch next
Worley will hold its Investor Day on 14 May 2026, which represents the next major catalyst for updated guidance and strategic clarity. The company has committed to continuing close monitoring of developments and providing further market updates as required.
Key Date
Investor Day: 14 May 2026
The following table summarizes the shift in FY26 guidance:
| Metric | Original FY26 Guidance | Revised Position | Status |
|---|---|---|---|
| Underlying EBITA growth | Growth expected | Now unlikely to achieve growth | Downgraded |
| EBITA margin (excl. procurement) | 9.0-9.5% | 9.0-9.5% | Maintained |
| Aggregated revenue growth | Higher than FY25 | Higher than FY25 | Maintained |
Factors that will determine actual outcomes include the duration of the conflict, the extent of disruption to supply chains, the timing of deferred contracts, and the pace of recovery once conditions normalize. The preservation of margin guidance despite the EBITA impact suggests Worley expects to manage cost structures in line with reduced activity levels, while maintained revenue targets indicate confidence that project delays will not translate to permanent work loss.
The Investor Day will provide an opportunity for management to detail how it is navigating near-term uncertainty while positioning for medium-term growth opportunities in infrastructure security and reconstruction.
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