WorleyParsons continued to expand its global footprint, aided by two substantial acquisitions; being the South African business, TWP, and Rosenberg in Norway. TWP enables WorleyParsons to provide its global customers with access to engineering and project delivery capabilities for underground mining and precious metals, while the acquisition of Rosenberg provides WorleyParsons with an ideal platform to expand its presence in the fast growing Norwegian Continental Shelf market.
With a network of 165 offices, WorleyParsons is one of the most global companies in our international peer group. This global diversification has been an important factor in the ability of WorleyParsons to offset challenging conditions in a number of key markets, particularly South Africa and Western Australia, by capitalizing on opportunities in better performing markets.
We have been pleased by the strong performance by our Chemicals sector, and by the continuing strength of our Hydrocarbons sector, particularly in Australia and the Improve market in Canada.
The Group reported net profit after tax of $322 million, down 7% on our 2012 underlying result. Even in the current market conditions, the Group delivered a solid performance. It is pleasing to note that the Company delivered a strong operating cash flow of $444 million. Margin performance remains a concern, particularly in the Power and Infrastructure & Environment sectors.
The Board has resolved to pay a final dividend of 51.0 cents per share unfranked, taking the total dividend for the year to 92.5 cents per share, up 2% from 91 cents last year.
As the 2013 financial result was below the threshold for vesting, no combined incentive will be awarded to Executives. Non–Executive Director fees and Executive fixed pay and remuneration structure have been reviewed on both an Australian and global basis, but will not increase in 2014.
There is nothing more important to WorleyParsons than the safety of our people. To this end, the Board and Management continue to strive to achieve the goal of Zero Harm across all countries in which we operate.
During the period, the Health, Safety and Environment Committee of the Board commenced meeting. This Committee, chaired by Dr Haynes, has been responsible for making recommendations to the Board on issues such as the Group’s performance with respect to health, safety and the environment and the effectiveness of the resources and processes that the Group uses to manage risks in these areas. To provide visible leadership in this area, there has been an increase in the number of visits made to WorleyParsons’ sites by both members of the Board and by senior members of the leadership team.
We have always been, and remain, fundamentally a people business, we rely on our people to meet our customers' needs. Our people continue to grow and adapt to respond to the changing needs of our customers and the dynamics of our markets. By retaining a deep focus on our people and our culture we continue to serve our customers and respond to our markets in challenging times.
Central to our People strategy is our empowered and entrepreneurial spirit and our local/global organizational model. It is inspiring to hear stories of our people achieving extraordinary results through their technical expertise, focus on customer relationships and passion for collaboration. This combination of culture and capability augurs well for even greater success for WorleyParsons in the future.
I would like to express the Board’s appreciation and admiration for the commitment and contribution to WorleyParsons by our people over this past year.
The Board recognises that WorleyParsons' reputation for honesty, integrity and ethical dealings is one of its key business assets and a critical factor in ensuring the Company’s continued success. All of WorleyParsons’ people continue to strive to maintain the standard of ethical behaviour expected by our people, customers, suppliers and shareholders.
During the period the Company has issued an updated Code of Conduct that emphasizes the importance of a culture in which ethical issues and concerns can be discussed freely and openly without any fear of retribution. The Company has also acted to ensure that those who we engage with, or partner with in business, share WorleyParsons’ ethical values and act in accordance with those values.
The Company continues to refine its corporate responsibility efforts across all the parts of the world in which we do business, in an effort to ensure that our programs are as effective and efficient as possible in delivering value to the communities we support. The Corporate Responsibility section of this Annual Report provides greater detail on these activities.
The Board remains confident that the Company has in place a strong corporate governance system, and that this system is well maintained, reviewed and updated. Our governance policies and procedures are benchmarked against other comparable companies to ensure that the appropriate standards are maintained.
The Group maintains a comprehensive, independent, internal audit program that reports directly to the Audit and Risk Committee. This function not only focuses on specific areas of interest, but provides an annual assurance to the Audit and Risk Committee of the adequacy and effectiveness of the Group’s internal controls.
On 23 October 2012 Andrew Wood took up the position of Chief Executive Officer, and became a member of the WorleyParsons Board. I have been very pleased with the leadership that Andrew has provided to the Group in these challenging times and would also like to acknowledge the exceptional support that Andrew continues to receive from his leadership team.
In February this year I was honoured to accept the invitation of the non-executive directors to re-join the WorleyParsons Board as non-executive Chairman. In doing so, I took over as Chairman from Ron McNeilly, who has been a member of the WorleyParsons Board since November 2002 and Chairman since November 2004. Ron continues to serve on the Board as the Deputy Chairman and Lead Independent Director.
I would like to acknowledge the outstanding job that Ron has done as Chairman over the past 9 years. I look forward to continuing to work with Ron and am confident that the Company will continue to benefit from his knowledge and insight.
I would like to thank the WorleyParsons leadership team, and my fellow directors, for their excellent work in what has been a challenging year for WorleyParsons. I believe that the hard work that has been done over this period means that the Group is well positioned to take advantage of the growth opportunities that we continue to see in the market.