By Ian McConnell

SHARES in Weir Group surged yesterday, after the Glasgow-based engineering company said its mining-sector business had “continued to show its resilience” through the coronavirus pandemic.

Weir’s stock-market worth climbed by £144 million to nearly £2.83bn, as shares rose 55.5p or 5.4 per cent to 1088.5p after the trading update.

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The group, which has major operations serving the mining sector in North America, Latin America, Africa and Australia, said that after-market orders in its minerals division in the second quarter “have been similar to Q1 in absolute terms despite the impact of Covid-19 restrictions”. It revealed original equipment orders in the three months to June “have also continued at Q1 levels in absolute terms, with a number of larger gold project orders offsetting general delays across other commodities”.

Weir declared profit margins in the division had remained within their normal 17% to 20% range, “supported by cost mitigation actions”.

The minerals division is most heavily exposed to copper mining, mainly in Latin America. It also has a major presence in gold and iron-ore mining.

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Weir, which employs about 14,500 people, said it had “as expected” seen a “significant step-down in North American activity levels” in the second quarter in its oil and gas division. This business, which Weir has signalled its intention to exit when the time is right, has a heavy exposure to the North American shale sector. Weir has reduced its oil and gas workforce by around 350 this year.

The group noted that, as announced on March 26, it had withdrawn full-year profit guidance because of ongoing uncertainty as a result of Covid-19. It added: “The board will reinstate guidance when it has sufficient confidence on the outlook for the rest of the year.” Weir will publish first-half results on July 29.

Weir has completed the refinancing of its main banking facilities with a syndicate of 12 global banks. These comprise a new $950m revolving credit facility and a new £200m term loan.