Weir Issues Profits Warning

Weir Group, the listed UK engineering company, has warned that 2016 full-year profit was expected to be lower than market expectations, on November 1.

According to a company filing, the company said that orders were down 7% compared with the same period last year owing to tougher conditions in the Middle East and North American oil and gas market. Weir Group is the world's biggest producer of fracking pumps for oil and gas companies.

"Given conditions in the Middle East, as well, we now expect the (oil and gas) division to be around break-even in the fourth quarter and slightly loss-making for the full year," said Jon Stanton, recently appointed CEO of the Weir Group. Mineral constant-currency revenue is expected to be slightly up on last year, and operating margins broadly in line with 2015 levels at 19.2%.

"There are signs in the Group’s third quarter performance that our core markets have started to improve. Minerals aftermarket orders returned to growth and North American Oil and Gas customers started planning for higher activity levels next year," Stanton said.

"The strength of the team together with our global leadership positions in mining and oil and gas, deep customer relationships and investment in innovative technology, give the group a robust platform for long-term growth," he added.

The company hasn't provided any full-year numbers, but the current consensus adjusted pretax profit is £184mn ($226mn), taken from FactSet. The company was reported £220mn profit in 2015.

Murat Basboga