Glasgow-based engineering company Weir Group said revenue in the six months to June 30 fell to £866 million from £981 million for the same period last year and pre-tax profit slipped from £108 million to £82 million as activity in oil and gas markets remained at “very low levels.”
Weir also said chief executive Keith Cochrane would step down later this year after 10 years on its board and be succeeded by finance director Jon Stanton.
Weir shares were down about 3% at £14.76, giving the firm a current stock market value of around £3.2 billion.
Of the results, Cochrane said: “While markets remained challenging, the minerals division fully captured available opportunities, flow control improved margins and oil & gas grew market share in important product categories.
“As a whole, the group continued to be highly cash generative and aggressively reduce costs, while also extending its technology leadership in products and services which are vital to our customers’ operations.
“Our full year guidance for a reduction in constant currency group operating profits is unchanged.
“Our reported numbers will benefit from a positive currency effect in the second half if current rates prevail.
“While there have been early signs of stability in oil and gas markets, activity remains at very low levels with only a modest improvement expected in late 2016.
“Conversely, there are signs of mining markets normalising, supported by commodity prices and an improving pipeline of brownfield opportunities.
“Looking ahead, we will continue to prioritise strong cash generation and invest in the strategic priorities which will ensure the group is positioned to benefit fully as markets recover.”
Weir said it continued its aggressive approach to cost reduction and is on track to deliver a further £50 million in annualised savings by the end of 2016.
In the first half, this included its minerals division “delivering £24 million of incremental annualised savings involving a reduction in management layers as part of a wider series of initiatives, with an associated 150 workforce reduction.”
Weir said its oil & gas division reduced its workforce by 340, primarily in North America, and “continued its facility consolidation programme with the closure of 12 service centres in the period and is on track to deliver £23 million in incremental annualised savings by the year end.
“In total, by the end of 2016, the division will have closed two manufacturing sites and 24 service centres since the start of 2015 and across the group £160 million in annualised savings will have been delivered since Q4 2014.”