3rd Nov 2015 07:44
LONDON (Alliance News) - Weir Group PLC on Tuesday said its full-year results are set to be broadly in line with market expectations despite further weakness in its key markets in the third quarter.
The FTSE 250-listed engineering firm said the challenges in its markets intensified in September and October, with further declines in work from the oil and gas industry amid project deferrals and cancellations continuing due to the low oil price. The group's minerals division, which serves the commodities market, put up a resilient performance, Weir said, but its key markets remain very challenging.
Overall order input fell 29% in the third quarter to the end of September and was down 8.0% from the second quarter, though the group did achieve some operational progress in its power and industrial division, where margins improved.
Weir is continuing its cost-cutting push, with a further GBP25 million in annual costs cut in the third quarter, bringing its total cost reduction measures over the course of 2015 to GBP110.0 million in annual savings.
"The challenges in our end markets intensified during September and October. Mining customers took measures to preserve cash by delaying investments, reducing purchases of consumables and mothballing or curtailing production volumes at higher cost mines," said Chief Executive Keith Cochrane.
"Looking ahead, we expect trading conditions to remain challenging through the fourth quarter with further declines in upstream oil and gas activity. We will focus on delivering further cost and procurement savings, alongside strong cash generation. We continue to expect a sequential improvement in our second half performance with our full year earnings expectations broadly in line with market consensus," Cochrane added.
By Sam Unsted; [email protected]; @SamUAtAlliance
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