WOR - up 8% and over 52 week high, page-39

Goldman Sachs have this to say:

FY16 result preview; guidance points to flat revenue outlook in 2H16

What we expect FY16 UNPAT of A$137mn: We expect FY16 underlying NPAT to be down 31% on pcp to A$137mn (vs. Bloomberg consensus at A$157mn), underpinned by lower Hydrocarbons revenue. This implies a 1H/2H UNPAT split of 54%/46%, which compares to the company’s guidance for profits to be biased to the 2H.

FY16 sales of A$6.0bn: We forecast FY16 sales to be down 17% on pcp to A$6.0bn (vs. Bloomberg consensus of A$6.3bn). This also implies that 2H16 sales is 10% lower on 1H16, compared to company guidance which calls for 2H16 sales to be flat sequentially on 1H16. Despite the lower 2H revenue, we forecast margins to be flat on 1H

Net debt and leverage to decline: We expect net debt to decline from A$1.0bn at 1H16 to A$0.8bn, supported (in part) by our expectation that both the interim and final FY16 dividends will be suspended. We also expect leverage (net debt/EBITDA) to decline from 2.5x at 1H16 to 2.1x.

Key data Current Price (A$) 7.68 12 month price target (A$) 4.05 Market cap (A$ mn) 1,905.3