Weir Group profit slump salved by currency devaluation

Profits were £170m last year, which was better than had many of the firm’s operations not been in US dollars.

Without the weaker pound, the constant currency decline would have been 31 per cent.

Revenue dropped 2 per cent to £1845m, though that was an 11 per cent drop without the help of currency fluctuation.

The company, which reported a two per cent fall in total revenue to £1.86 billion, said it generated £293m of cash from all operations during the year.

Weir said the downturn in the oil, gas and commodities markets was the worst it had seen in more than 30 years.

Its report cited the drop in capital spending by mining companies of 50 per cent since 2012.

The number of rigs used for fracking in onshore US oil and gas fields had fallen 80 per cent in only two years.

However, it said commodity prices rose during last year, and trading conditions improved towards the end of 2016.

The price of Brent crude was trading at $55.8 per barrel last night, having dipped below $29 at the start of 2016.

There were also signs of more activity in US onshore oil and gas towards the end of the year.

The new chief executive of Weir Group, Jon Stanton, who replaced Keith Cochrane in October, said: “Following a challenging and prolonged downturn, the group returned to growth in the fourth quarter of 2016 as our main markets showed signs of improvement and we benefited from our on-going investment in new technology and long-term customer relationships”.

Weir’s results come just a day after Wood Group reported a 62 per cent slump in profits.