Weir's first-half profit tumbles 75% as oil slump weighs
Industrial engineer Weir Group posted a 75% fall in first-half pre-tax profit due to a downturn in US oil and gas activity.
FTSE 100
8,121.24
16:49 01/05/24
FTSE 350
4,464.43
17:14 01/05/24
FTSE All-Share
4,418.60
16:54 01/05/24
Industrial Engineering
13,610.35
17:14 01/05/24
Weir Group
2,026.00p
17:14 01/05/24
Pre-tax profit in the 26 weeks to 3 July came in at £38.7m down from £157.7m in the same period a year ago, on revenue of £1bn, down 13% from £1.14bn.
Weir said its businesses in oil and gas were affected as oil prices remained around 50% lower than the previous year. This led to significant reductions in activity, with upstream operations in particular impacted.
Chief executive Keith Cochraine said: “This is the most severe downturn in oil and gas markets for nearly thirty years, and as a result North American upstream activity has reduced substantially. As we indicated through the first half, this has had a significant impact on the group's interim financial performance.
“During this period, we have remained focused on responding to these conditions, executing effectively and generating cash. Reflecting our ongoing confidence in the long term structural growth prospects of our markets, we continue to invest in our strategy and extend our global leadership positions.”
The company said it experienced a 39% reduction in oil and gas orders and recognised exceptional restructuring costs of £47m, including £33m of asset impairments.
Looking ahead, Weir said oil and gas will continue to be tough, with industry expectations of a modest improvement at best in North American activity levels towards the end of the year.