SHARES in Weir Group closed down nearly seven per cent last night after challenges in its dominant minerals division caused the Scottish engineering giant to issue a profits warning, wiping around £320 million from its stock market worth based on Monday’s closing price.
Weir said “project phasing, incremental investment in growth and one-off plant reconfiguration” will mean operating profits from its minerals arm will be “slightly” lower than previously indicated. The division, which booked revenues of £1.1 billion last year, is involved in mining and minerals processing in Asia, South America, Australia, Europe, the Far East and the US.
The profit warning came in spite of Weir reporting a 12 per cent rise in order growth from minerals customers in the third quarter, as well as the continuing recovery of the North American onshore oil and gas sector.
Weir has a big exposure to the US fracking sector, and shed around 2,000 jobs following the crude price slump in late 2014. But it underlined the ongoing recovery of the sector yesterday, with oil and gas orders rising 59 per cent in the third quarter. That helped lift group orders by 21 per cent, compared with the third quarter last year.
Chief executive Jon Stanton said the company, which employs around 14,000 staff in more than 70 countries, said: “At a group level, we anticipate strong growth in full year constant currency revenues and profits.
“Minerals profits are expected to be slightly lower than previously indicated while expectations for Oil & Gas and Flow Control are unchanged.”
Shares in Glasgow-based Weir closed down 143p at £19.53.
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here