Glasgow engineering giant Weir to take £20m hit from Russian withdrawal
Weir Group, the Glasgow-headquartered global mining engineer, is braced for a £20 million hit to profits after deciding to wind down its Russian business.
Last month, the firm announced the full suspension of business and operations in Russia.
Releasing a fresh trading update, bosses said they had since taken the decision to wind down the Russian business during 2022.
In Russia, the FTSE 250 group’s business comprises a sales and service organisation employing 267 people, the majority of whom sit within the minerals division.
Weir said: “We strongly condemn the Russian military invasion of Ukraine. Our priority remains the welfare of our Ukraine-based colleagues and their families and we are keeping in close contact, supporting them in whatever ways we can.
“More widely, we are deeply saddened by the humanitarian crisis that continues to unfold and have pledged financial support to organisations working at the front line to help the people of Ukraine.”
The loss of sales in 2022 is expected to have an impact on group underlying operating profit of up to £20m in the year.
“We believe the long-term growth drivers for the group remain firmly in place driven by decarbonisation and broader economic development, notwithstanding the Russian invasion of Ukraine,” the firm added. “Indeed, the implications of recent events will likely see them accelerate.”
Weir’s update also revealed a record quarter with strong order momentum. The group expects to deliver strong growth in constant currency revenue and profit in 2022.
Chief executive Jon Stanton told investors: “The group has had an excellent start to the year, generating record orders and executing strongly in a complex global environment.
“Conditions in mining markets are highly favourable as high commodity prices ensure miners remain incentivised to maximise ore production, which is driving demand for recurring aftermarket and debottlenecking solutions.
“Looking ahead to the full year, we remain confident in the outlook and expect to deliver strong growth in constant currency revenue and profit in 2022 and anticipate progress towards our medium-term margin and cash targets.”
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