Scottish engineer Weir Group said yesterday the immediate outlook for its upstream energy business was brighter than a year ago.
It added that long-term prospects in oil and gas markets were still difficult to gauge but the short to medium outlook was strong.
Weir’s optimism for upstream work is based on higher rig counts and increased demand for after-market products and services as the global oil and gas sector increasingly looks to deposits in harsher areas of shale formation.
The company said it was seeing an increasing bias towards unconventional drilling and emerging interest in shale fracturing outside North America.
Announcing annual results yesterday, Weir said oil and gas business generated operating profits of £52million and revenue of £299million for it last year, against £73million and £332million respectively in 2008. Weir is active in two other main market areas: minerals and power/industrial.
The power and industrial arm saw revenue rise by 1% to £242million, with operating profits up by 16% to £23million. Revenue at the minerals division fell by 1% to £813million but operating profits were 2% higher at £134million.
Across the group, 2009 adjusted pre-tax profits came in at £187million on revenue of £1.39billion, up by 6% from £176million and by 3% from £1.35billion respectively a year earlier.
Weir also reported an “exceptional” cash performance and said its net debt more than halved last year, to £119million.
Chief executive Keith Cochrane said: “In a difficult global economic environment Weir Group has again performed strongly in 2009 . . . making good progress against our key priorities.
“We have an excellent platform for growth and a clear strategy to extend the group’s presence in three attractive markets with positive fundamentals. The group is in robust financial health and well placed to capitalise on market opportunities.”
Mr Cochrane said uncertainty remained over the pace and timing of global economic recovery but Weir forecast broadly unchanged profits this year.
Weir was founded in 1872 by two brothers, George and James Weir, who invented pumping equipment aimed primarily at Glasgow’s flourishing shipbuilding industry.
It now employs more than 9,000 people across the three divisions, set up two years ago as part of a major restructuring of the group.
Shares ion the group were 7.8% higher last night at 926.5p.
