Worley Faces Dual Financial Pressures from Legal Ruling and Middle East Conflict

Australian engineering, procurement, and construction contractor Worley is confronting significant financial challenges from two fronts: a landmark court ruling in a long-running shareholder class action and an escalating impact from the Middle East conflict. The class action, initiated in 2015 by investors who purchased shares in 2013, stems from allegations that the company misled the market after it revised its profit forecast for the 2014 financial year from at least A$322 million down to between A$260 million and A$300 million in November 2013. Although Australia's Federal Court initially dismissed the case in 2020, making Worley the first defendant to win such a trial, the Full Court of the Federal Court of Australia recently overturned this decision in a landmark ruling. The ruling established that shareholders who bought shares in an inflated market do not need to prove they personally relied on the company's misleading forecasts to claim damages. Following this decision, Worley confirmed on 29 May 2026 that the Full Court had allowed an appeal, and the company has since applied to the High Court for special leave to appeal. Worley noted that its legal defense has been funded by insurers, except for an initial deductible paid previously.

Increased Financial Impact from Middle East Conflict

In addition to the legal proceedings, Worley has reported a greater-than-expected financial impact from the Middle East conflict. The company stated that the extended duration and ongoing disruption have hindered the progress of existing projects, with customers delaying the commencement and award of new projects, though no cancellations have occurred. Consequently, the adverse impact on the financial year's underlying EBITA (earnings before interest, taxes, and amortisation) has continued. Worley now estimates the impact to its 2026 financial year underlying EBITA to be up to A$60 million (US$41.37 million), an increase from the previous estimate of A$30 million to A$40 million. Furthermore, the strengthening of the Australian dollar in the second half of the 2026 full year is expected to affect reported results, with an estimated A$50 million impact on this year's reported underlying EBITA due to the conversion of foreign currency earnings.