Glasgow-based global engineering and mining giant Weir Group said on Thursday it enjoyed record first-quarter orders with a 15% rise.
However, Weir said the suspension of its business in Russia is expected to have an impact on underlying operating profit of up to £20 million in the year and the move “could result in an exceptional write-off during 2022.”
Weir Group is one of Scotland’s biggest listed companies and it employs more than 11,000 people around the world.
Weir CEO Jon Stanton said: “The group has had an excellent start to the year, generating record orders and executing strongly in a complex global environment.
“Conditions in mining markets are highly favourable as high commodity prices ensure miners remain incentivised to maximise ore production, which is driving demand for recurring aftermarket and debottlenecking solutions.
“We continue to successfully manage the disruption in global supply chains from Covid-19 and the impact of inflation.
“Looking ahead to the full year, we remain confident in the outlook and expect to deliver strong growth in constant currency revenue and profit in 2022 and anticipate progress towards our medium-term margin and cash targets.”
On Russia and Ukraine, Weir said: “We strongly condemn the Russian military invasion of Ukraine.
“Our priority remains the welfare of our Ukraine-based colleagues and their families and we are keeping in close contact, supporting them in whatever ways we can.
“More widely, we are deeply saddened by the humanitarian crisis that continues to unfold and have pledged financial support to organisations working at the front line to help the people of Ukraine.
“Our thoughts are with all those whose lives are being affected by these events and join with others in hoping for a swift and peaceful end to the hostilities.
“In Russia, the group’s business comprises a sales and service organisation employing 267 people, the majority of whom sit within the Minerals Division, and we remain focused on their welfare during this difficult time.
“In March the group announced the full suspension of business and operations in Russia.
“Given the evolution of the situation in Ukraine and Russia, the group has since taken the decision to wind down its Russian business during 2022.
“The loss of sales in 2022 is expected to have an impact on group underlying operating profit of up to £20m in the year.
“The group’s assets in Russia comprise primarily of inventory and receivables and represent c.2% of the group’s net assets.
“While a review of the recoverability remains ongoing, this could result in an exceptional write-off during 2022.”