Engineering news
Global engineering company Weir Group has reported a 2% fall in pre-tax profits to £409 million for the year ended 2 January 2015.
The company, which is based in Glasgow, posted flat full-year revenues of £2.44 billion.
Weir Group said it had been a challenging year, which saw it take a number of operational efficiency and cost reduction measures, when complete these will see the workforce reduced by 8% or approximately 1,200 people.
As a result of an efficiency review announced in November 2014, the group announced plans to consolidate five smaller manufacturing facilities into larger units and reduce headcount by 350 posts across all three divisions, targeting £35 million of annualised savings, £20 million of which will be delivered in 2015.
In addition, following the recent substantial oil price decline further steps have been taken by its Oil & Gas division, which in total will result in a 22% reduction - about 650 posts - in its North American workforce, insourcing production and reducing operating costs.
Weir said orders in its Minerals division fell as a result of continuing declines in customer capital expenditure and the impact of industrial actions in South Africa, which affected demand for both original and aftermarket equipment.
It said the performance of its Power & Industrial business was disappointing with overall orders down 4% as strong growth in hydro markets was more than offset by project delays in power and wastewater markets.
Keith Cochrane, chief executive, said: “2014 demonstrated the strength of Weir’s strategy and aftermarket-focused business model as we captured good growth opportunities in fast changing markets. Significant progress was made in developing new products, working in partnership with customers, expanding into new markets through the acquisition of Trio, and streamlining our operations to maintain cost competitiveness.”
“In terms of outlook for 2015, we will continue to make progress in delivering our strategy while responding to market conditions as they evolve. The group has already acted following steep price declines in key commodities, particularly oil, taking additional measures to reduce operating costs.
“While visibility in oil and gas remains limited, it is clear that the group’s strategic progress and cost initiatives will only partly offset the impact of a substantial reduction in demand and the associated pricing pressure. As a result we are planning for a significant reduction in constant currency group revenues and lower operating margins in 2015. However, we will continue to invest in extending the group’s global leadership positions and increasing market share, supported by a strong balance sheet and the cash generative nature of the group.”
Weir acquired Trio, a Chinese rock crushing company, in October following a failed bid to acquire Finnish rival Metso.