Your business has improved in many ways over the last 12 months. Gross margin and EBIT Margins have increased, chargeability is on target, cash collection is improving and importantly, backlog for new work has increased. This improvement has been driven by the Realize our Future initiatives that have reshaped and resized the business to meet the changing market dynamics.
Annual Report 2017
We made substantial progress during the year on our near-term priorities including improving our level of customer satisfaction, reducing internal costs, streamlining our service delivery and strengthening our balance sheet.
Our cost reduction program lowered overheads by $170 million when compared to the prior year. By the end of June we have achieved annualized cost reductions of $200 million, exceeding our target of $120 million. These savings reduced the impact of lower revenues on our underlying EBIT margin.
The past 12 months have been a challenging time for our customers who have been impacted by sustained low commodity prices and the fall in oil prices. This has led to reduced activity levels across the resources and energy sectors. WorleyParsons has not been immune from the impact of this reduction in our customers' capital and operating expenditure, although our geographic diversification and broad range of services have been important factors in maintaining a resilient business.
Annual Report 2015