LONDON (ShareCast) - (Sharecast News) - Oil and mining services company Weir Group on Tuesday issued a profits warning for its oil and gas division as US customers deferred orders in the third quarter.
Orders for division in the third quarter were 32% lower year on year reflecting challenging market conditions in North America. Original equipment orders fell 26% and aftermarket orders decreased by 34%, reflecting market trends, the company said in a trading statement.

Weir said the division started a £30m cost reduction programme that included reducing its North American workforce by around 20%, or 450 posts jobs, reducing non-direct overheads and the introduction of mandatory leave for staff.

The move would result in an exceptional restructure charge of £20m, the company added.

Elsewhere, the company said a £100m Australian mining contract helped the Glasgow-based group report a 72% rise in equipment orders at its minerals unit while mining tools maker ESCO, bought last year for $1.3bn, saw orders rise by 9%.

"Our project pipeline in mining remains encouraging but in the third quarter we saw some project approvals deferred due to negative macro sentiment," said chief executive," John Stanton.

"In North American oil and gas markets, demand was impacted by an intensified focus on cash preservation in the quarter. Looking forward, we now expect 2019 full year operating profits in the oil & gas division to be below our previous range with guidance for both Minerals and ESCO divisions unchanged."

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