The Worley Ltd (ASX: WOR) share price is down by 4.41% today and sits at $10.19 per share at the time of writing. Worley (formerly Worley Parsons) is a global provider of engineering services to the energy, resources and chemical sectors.
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Why is the Worley share price under pressure?
Today, Worley released an investor presentation and also announced its plan to transition toward sustainable energy. The announcement has had a negative effect on the Worley share price so far.
In the presentation, Worley indicated that many of its customers are moving toward renewable energy, a move sped up by recent volatility in oil prices. The company announced that key customers had reduced capex on hydrocarbon investments by around 30%. However, it stated that it had experienced an "accelerating wave of renewable energy investments, supported by energy storage, decarbonization projects and gas as a transition fuel."
Additionally, Worley has announced it will work to become more sustainable in the way that it provides services to customers. It has committed to work with customers to deliver projects more sustainably across the entire life cycle. The company announced that it aims to create a net zero road map for direct carbon emissions. It will do this while helping customers to reduce their emissions with sustainable solutions.
Worley also suggested that it will assess its involvement in carbon-intensive projects. This could see the company turning down projects that produce heavy emissions and has undoubtedly contributed to the drop in the Worley share price today.
Worley's plan to transition into sustainable energy will take place across all of the sectors in which the company operates. Some of the company's initiatives will include decarbonisation, energy efficiency, low carbon hydrogen, renewable energy, distributed energy systems, biofuels, carbon capture and storage, nuclear power, waste to energy and the use of gas as a transition fuel.
In its announcement, Worley also flagged that the impact of the coronavirus had created some supply chain issues. This had slowed some projects and likely added to the negative pressure on the company's share price today.
The Worley share price is down 33% since the beginning of January and down 38% from its 52 week high of $16.45.
