Gas slump dents orders at Weir but overall profits are on track
ENGINEERING group Weir yesterday said it would meet expectations for 2012, as buoyant demand for pumps and valves in the mining and power markets offset a weaker performance in its oil and gas division.
The company, which in 2011 twice upgraded its profit guidance as it reaped the benefits of the booming US shale gas market, said total orders rose five per cent in the first 13 weeks of the year on a like-for-like basis.
Investors were unconvinced by the update, however, sending Weir’s shares down 5.1 per cent to 1,514p.
Orders in its oil and gas division have plunged by 26 per cent. The firm blamed a move towards shale rock and away from gas in the US, after a gas glut pushed prices to their lowest levels in a decade and sent firms looking for more profitable fuels.
Uncertainty in the shale market led to orders being cancelled in that division.
Weir said the US oil and gas market weakness was temporary, calling it a “transitional phase””.
Mining orders rose 18 per cent, ahead of expectations, with power and industrial orders up 27 per cent, Weir said, adding that total operating profits were up on the prior year period.