barnsty, im merely locking in profits along the way, like i have...

barnsty, im merely locking in profits along the way, like i have been since IPO,if you dont lock in some profits along the way thats merely a investors mistake if you would like some insight of reasoning.

From WORs last Result its no longer squeaky clean - WOR reported inline NPAT, helped by a $12M gain from FX contracts. This is the first such gain in 3 years. It is unclear why this has occurred. Bottom-line is we do not think such earnings should be regarded as recurring.

DSO remains elevated - Cash flow improved from the low levels in prior years, but still below earnings. Despite WOR's effort, DSO stood at 78 days, vs. 80 days in 2H08. Why is it that WOR's customers do not pay timely? In Aug, WOR blamed the new accounting/invoicing systems, but improvement seems limited.

Pricing pressure looks set to pick up - EBIT margin dropped 30 bps y/y and 210 bps h/h, the first time in 3-4 years. Procurement revenue accounted for just 10 bps of the weakness, and we suspect pricing pressure is the major cause. Overnight, competitor and JV partner FWLT stated that for the first time, the oil/gas sector is facing competitive margin pressure. It will likely get worse.

Low oil price to impact projects, but with a lag - If investors believe 1H09 is a harbinger for FY10, they are likely too optimistic. 1H09 was not supposed to be a tough half. Oil prices dictate industry capex, but with a lag (roughly a year previously). Therefore, 1H09 still reflects the strong and rising oil price, not the depressed oil price of today. Some oil majors may invest through cycle, not Shell and Conoco, both of which backtracked and cut capex recently.


im still in for the longhaul i merely think there will be some short volatility remaining