LONDON (ShareCast) - (Sharecast News) - Engineering group Weir said it would take a hit of up to £20m as it announced an exit from Russia due to the Ukraine war.
The Glasgow-based group had already announced last month it was suspending its operations in the country, but on Thursday said it has would now fully by the end of the year "given the evolution of the situation".

Underlying earnings would suffer by up to £20m due to the loss of sales, while Weir warned there could also be write downs as a result in 2022 although it is looking into the "recoverability" of its Russian assets.

In a first-quarter update, Weir reported a 15% rise in orders in the first three months of 2022 thanks to "very strong demand" in the aftermarket.

It said favourable conditions in global mining markets drove increased demand for aftermarket and debottlenecking solutions.

Activity and demand were positive across most regions, particularly in North America as miners looked to upgrade their assets, and in South America demand was also strong driven by an increase in small and medium sized brownfield activity.

However, globally, large expansion projects remained slow to convert, the company said.

"We continue to successfully manage the disruption in global supply chains from Covid-19 and the impact of inflation," said chief executive Jon Stanton.

The group said it expects to deliver "strong constant currency revenue and profit growth in 2022, in line with our previous expectations, adjusted for the impact of loss of sales in Russia".

Shore Capital analysts said full-year consensus expectations for the company were likely to be trimmed by up to 6% after the decision to pull out of Russia.

"Population growth, the convergence of living standards in developing economies, urbanisation, ore grade decline and decarbonisation all point in Weir's favour as demand for essential mining commodities is growing/required," they added.

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