Weir Group plans more layoffs after "challenging" first quarter for oil and gas

29th Apr 2015 07:51

Industrial engineer Weir Group said it was "taking further action to support profitability" with further cost cuts in its oil and gas division after a challenging first quarter.Order input across the whole company was down 9% on the same period last year and 10% lower than the fourth quarter of 2014 on the back of a big drop in North American oil and gas activity levels.On a like-for-like basis, group order input was down 12%.Original equipment orders were 22% lower than last year while aftermarket orders fell 2%."Trading conditions in oil and gas markets were challenging through the quarter with a steeper decline in the North American rig count than the market had anticipated," said chief executive Keith Cochrane.He said that further declines in oil and gas revenues are expected in the second quarter."In response the group is taking further actions to support profitability, including additional workforce reductions and service centre consolidations," Cochrane said.At the same time, order input in the minerals division was up 5% year-on-year.However, mining end markets are still challenging with iron ore prices having fallen further during the quarter. Weir said capital expenditure across the industry reduced, albeit at a slower rate than 2013 and 2014, with projects continuing to be deferred.Power and industrial order input fell 14% as valve and hydro orders were affected by project delays across mid and downstream oil and gas and power markets.Weir's share price was down 1.3% at 1,715p in early deals on Wednesday.