WEIR Group has cited reduced activity in the US oil and gas sector as it reported a seven per cent fall in underlying orders for the first three months of the year.
The engineering giant flagged capital and pipeline constraints in North America as oil and gas orders dropped by 23 per cent in the period, compared with the first quarter of last year.
However, the company declared that it had seen “good momentum” in mining markets. And it said that ESCO, the Oregon-based company which supplies ground-engaging tools for the surface mining and construction sectors, had exceeded initial expectations since its acquisition.
Weir said that, including ESCO, first quarter orders from continuing operations had increased by 18 per cent.
The firm said it was on course to complete the disposal of its Flow Control division in the second quarter. It agreed a deal to sell the operation to global private equity firm First Reserve for £275 million in February.
Chief executive Jon Stanton said: “Weir has continued to deliver, with our first quarter performance in line with our expectations. We benefited from our strengthened leadership position in mining where we are helping more customers meet their priorities of optimising current operations and planning for future expansions.
"ESCO's performance remained ahead of initial expectations with good demand for its premium technology. As expected, oil and gas markets were at similar levels to late 2018 as a result of capital and pipeline capacity constraints in North America and the absence of the strong levels of first half refurbishment activity seen last year."
He added: “The group's full year outlook of good constant currency revenue and profit growth remains unchanged.”
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