Glasgow engineering giant Weir Group banks on mining as profits cool

Weir Group, the Glasgow-headquartered global engineer, has suffered a 41 per cent drop in fist-half, pre-tax profits amid the downturn in oil and gas markets.

Weir Group is focused on the mining, oil, gas and power markets. Picture: Weir Group
Weir Group is focused on the mining, oil, gas and power markets. Picture: Weir Group

Chief executive Jon Stanton pointed to “unprecedented times” but said the group had “adapted quickly to the challenges of Covid-19”. He highlighted resilient demand in Weir’s core mining markets.

The FTSE 250 firm posted a profit before tax of £63 million for the six months ending 30 June, down 41 per cent from the £106m banked a year earlier. Overall revenue fell 17 per cent to just under £1.1 billion.

Hide Ad
Hide Ad

Weir, which is not proposing to pay an interim dividend due to the “ongoing uncertainty”, is focused on the mining, oil, gas and power markets. It has taken a knock during the coronavirus crisis due to the slump in oil prices.

Stanton said: “Our core mining technology businesses showed their inherent resilience and the critical role they play in keeping essential activities running. Our oil & gas team also skilfully navigated extremely challenging market conditions.

“As we look ahead, while the business is performing well, it is too early to provide guidance on the full-year given ongoing uncertainty due to Covid-19.

“More broadly, the long-term outlook for mining remains positive, supported by demographic trends, carbon transition, the long-term decline in ore grades and the need to reduce waste and water and energy consumption.”

Analysts at brokerage Shore Capital noted: “Weir announced in February 2020 that it is considering options with regards to the disposal/exit of the oil and gas division.

“This would result in Weir becoming a pure-play mining-focused business which reduces volatility and enhances its earning quality via its aftermarket earnings profile (i.e. less cyclicality).

“We retain our hold recommendation,” they added.

Read More
Glasgow engineer Weir Group sees virus pain intensifying in second quarter

A message from the Editor:

Hide Ad
Hide Ad

Thank you for reading this story on our website. While I have your attention, I also have an important request to make of you.

The dramatic events of 2020 are having a major impact on many of our advertisers - and consequently the revenue we receive. We are now more reliant than ever on you taking out a digital subscription to support our journalism.

Subscribe to scotsman.com and enjoy unlimited access to Scottish news and information online and on our app. Visit https://www.scotsman.com/subscriptions now to sign up.

By supporting us, we are able to support you in providing trusted, fact-checked content for this website.

Joy Yates

Editorial Director

Comments

 0 comments

Want to join the conversation? Please or to comment on this article.