Weir Group PLC (LON:WEIR) have seen their shares jump nearly 7% despite the firm giving shareholders mixed annual results.
The engineering firm noted that it had swung to an annual loss, due to an impairment charge it tase over its North American assets.
The CEO commented: “North American oil and gas market conditions deteriorated significantly through the year and we undertook a major cost reduction programme in response. 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 maximise value for shareholders whenever the right opportunity is identified”
On a better note, Weir Group reported that it had seen a rise in orders and revenue, which is a positive for shareholders.
Across 2019, the Glasgow based firm reported a pretax loss of £372 million compared to a profit of £86 million one year ago.
The impairment charge faced totaled £546 million, and was recorded within the Oil and Gas North American cash generating unit.
Weir noted that challenging market conditions, and market uncertainty led to estimates of future cash flows featuring lower revenues and margin assumptions.
Pretax profit also slipped 2% from £310 million to £303 million on an adjusted basis.
Weir saw their revenues increase by 9% to £2.66 billion from £2.45 billion the prior year. On a constant currency basis, revenue rose 8% but slipped 4% on a like for like basis.
The firm also told the market that total orders increased by 8% on a constant currency measure to £2.79 billion.
Weir declared a final dividend of 30.45p, which brings the total payout to 45.95p which sees an increase from 46.20p the year before.
Jon Stanton, Chief Executive Officer said:
“2019 saw a strong performance from our mining businesses with margin expansion in both Minerals and ESCO. Our innovative technologies are helping mining become more sustainable as shown by the record £100m Iron Bridge order for our energy-saving Enduron® HPGR technology. We have a major role to play in enabling net zero in mining underpinned by our commitment to reduce our own environmental footprint including cutting our CO2 emissions by 50% by 2030.
Looking to the year ahead, there is uncertainty over the impact of coronavirus (COVID-19) on the global economy and demand for natural resources. Assuming underlying demand does not change, we expect further good constant currency growth in our mining-focused businesses to be offset by the continued challenges in North American oil and gas markets.”
Shares in Weir Group PLC trade at 1,333p (+6.64%). 26/2/20 11:50BST
