Glasgow-based engineer Weir Group today signalled an upturn in its key markets as it announced a 50 per cent jump in orders from the oil and gas industry.
The firm, which makes pumps, valves and crushing equipment for the energy and mining industries, said it was well placed to benefit from an increase in activity levels, with overall orders for the first three months of the year up 15 per cent.
• READ MORE: Weir on road to recovery after ‘prolonged’ downturn
Chief executive Jon Stanton, who succeeded previous Weir boss Keith Cochrane in October last year, said: “Mining and oil and gas markets continued to grow in the first quarter, supporting the view that we are at the beginning of a cyclical upturn in our main markets.
“Assuming commodity prices remain supportive, we continue to anticipate good growth in constant currency revenues and strong cash generation, with full-year profits anticipated to be in line with current market expectations and weighted towards the second half.”
Announcing a 22 per cent slide in annual profits in February, Stanton said that Weir had seen a return to growth in the final three months of 2016 as commodity prices picked up after what he described as a “challenging and prolonged” downturn.
Today the group said oil and gas order input for the first quarter was 50 per cent higher than a year earlier, slightly ahead of expectations and boosted by “significant” growth in onshore activity in North America.
However, it noted that “pricing levels remain depressed, with only slight improvements achieved in certain minor product lines”, while progress in North America had been partially offset by a slight decline in the Middle East, where customers continued to reduce activity and postpone orders and maintenance.
Stanton also said that power, midstream and downstream markets continued to be challenging and will take longer to recover.