Weir to Become Mining Tech Pure Play
Weir Group plc has announced that its focus is now on becoming a mining technology pure play.
In its latest results statement, the company revealed that it is looking for opportunities to “maximize value” from its oil and gas division “at the right time”.
Operating profit for the company’s oil and gas segment, including joint ventures, was $47 million (GBP 37 million) last year, compared to $130 million (GBP 101 million) recorded in 2018, on a constant currency basis. The decrease was driven by lower activity in North American markets, according to Weir.
The division completed a $45 million (GBP 35 million) annualized cost savings program last year, which included reducing its workforce by around 600 people. Weir’s oil and gas segment currently employs around 2,500 people, principally in North America, according to a company spokesperson.
“North American oil and gas market conditions deteriorated significantly through the year and we undertook a major cost reduction program in response,” Jon Stanton, Weir’s chief executive officer, said in a company statement.
“While the long-term prospects for shale remain positive, current market dynamics mean it now has a very different investment case to our premium mining technology positions. We are therefore taking actions so that we can maximize value for shareholders whenever the right opportunity is identified,” he added.
Looking at 2020, Weir said there is currently uncertainty over the macro outlook for the global economy and demand for oil, which is heightened by the recent coronavirus outbreak.
In North America, industry expectations are for a further reduction in exploration and production expenditure in 2020, Weir pointed out. International markets are currently expected to continue their steady recovery, according to Weir.
Weir Oil & Gas provides highly engineered mission-critical solutions to upstream energy markets, according to the company. Products include pressure pumping and pressure control equipment, equipment repairs, upgrades, certification and asset management and field services to customers around the world.
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