Weir Group's first-half earnings hurt by challenging mining sector

31st Jul 2014 08:40

- Pre-tax profit and revenue fall- Growth expected in H2- Dividend raised 70%Engineer Weir Group's pre-tax profit slid in the first half, reflecting adverse foreign exchange currency exchange rate movements and challenging conditions in the mining industry. Pre-tax profit dropped 6% to £182m compared to a year ago, as revenue declined 5% to £1.14bn.The operating margin fell 50 basis points to 17.6%, reflecting industrial action in South Africa's mining sector. Operating profit decreased 7% to £201m.However, order input grew 10% to £1.24bn and the company has a positive outlook for the second half."We anticipate strong revenue and profit growth in the second half of 2014, assuming no further deterioration or disruption in mining end markets," said chief executive Keith Cochrane."As a result we remain on track to meet our full year expectations of good constant currency revenue and profit growth with group margins broadly in line with 2013 levels. Reported results will continue to be affected by foreign currency headwinds, which strengthened over the first half."The dividend was lifted 70% to 15p per share.A four-week strike in South Africa came to an end this week after the National Union of Metalworkers of South Africa (Numsa) said its 220,000 striking members had "unanimously" accepted the employers' offer.Weir shares were down 2.85% to 2,592p at 08:40 on Thursday. RD