Weir Group cuts full-year profit guidance

4th Nov 2013 07:08

- Full-year profit guidance cut- Third quarter revenue and profit miss expectations- Net debt lowerEngineering company Weir Group has cut its full year profit outlook due to the impact of the recent weakness in the US and Australian dollar. The firm expects profits, based on current estimates of average full-year exchange rates, to be £8m to £12m lower, according to a trading update for the third quarter.Annual profits before tax, amortisation and exceptional items are anticipated to be in the range of £425m-£435m with margins broadly in line with the prior year. In the third quarter revenues and profits were slightly below expectations, reflecting project delivery delays in the Minerals division and a more gradual than anticipated recovery in upstream oil and gas markets. Input was 5% higher than a year ago with underlying growth and a positive book to bill ratio in the Minerals and Oil and Gas divisions. Original equipment orders were down 4% while aftermarket orders were up 15%. In Minerals, order input was up 4% while in Oil and Gas it was up 33% and in Power and Industrial is was down 19%.Net debt at September 27th was reduced with positive cash generation in the third quarter supported by the foreign exchange translation benefit of US dollar denominated debt. "The group is expected to continue to be cash generative in the fourth quarter, such that we expect a further reduction in year-end net debt in line with previous expectations," the company said.RD