SHARES in Weir Group tumbled more than four per cent after the engineering giant reported a further drop in orders from the US shale market.

Glasgow-based Weir said oil and gas orders were down 27% in the six months ended June 30 compared with the same period last year, when it benefited from a surge in pressure pumping refurbishment and replacement activity. It noted there continues to be over-capacity in the pressure pumping market, which shale oil explorers and producers are continuing to work through.

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Investors responded coolly as Weir said its oil and gas operating profit would be towards the lower end of its previously-guided £55m to £95m range.

However, the company’s chief financial officer, John Heasley, insisted the long-term prospects for US shale remain strong.

And he pointed to a strong first-half performance by Weir’s dominant minerals business, which now account for 75% of the group’s revenue, amid strong global economic growth.

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The division, which supports the upstream mining sector across the world, saw orders increase by 5%, benefiting from strong demand for battery metals, including copper and lithium.

Weir’s challenges in North America dragged orders 7% lower on a like-for-like basis, which excludes the impact made by ESCO – the Oregon-based supplier of ground-engaging tools for the surface mining industry it acquired for $1.3 billion in July last year.

Taking ESCO into account, overall orders grew by 17%, including a 5% increase in minerals order intake. Weir said it is on course to achieve annual cost savings of £30 million as a result of the ESCO deal.

Total orders for the first half were worth £1.42bn, with operating profit climbing to £172m from £164m.

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Mr Heasley said the falling orders in North America reflected current over-capacity in the US frack fleet, but insisted the long-term outlook is positive.

He told The Herald: “Global demand continues to grow. US tight (shale) oil is going to show significant growth over the medium term – in fact it is forecast to double over the period to 2035 – and therefore this is a little bit of an air pocket just now, while we work through that short-term over-capacity to get to the long-term fundamentals.

“We continue to be well-placed in that regard as the global market leader in frack pumps. Over the medium term it is going to be a good place, but clearly in the first half of this year that has been a little bit soft on the numbers.”

Mr Heasley underlined the strength of the group’s minerals division, which sells original equipment and after-market services to the global mining industry. Asked to highlight areas of growth, he pointed to demand for copper in Latin America and lithium in Australia, where it is used in hard rock mining. He also pointed to strong demand from iron ore projects in Australia.

Meanwhile, Mr Heasley highlighted the progress made by Weir’s acquisition of ESCO, declaring that the firm’s expectations on the quality of the US business have been “hugely confirmatory”.

He said: “We set ourselves a target 12 months to get $30m of synergies over the medium term – we’ve already got a run rate of $20m, so we are ahead of schedule on that. [On] revenue synergies, we have identified opportunities of $50m and again [we are] making progress there. It just fits so well with the Weir business.”

The first-half saw the firm complete the sale of its Flow Control division to US private equity group First Reserve for £275m on June 28.

Meanwhile, Mr Heasley said the prospect of a no-deal Brexit, which has loomed larger since Boris Johnson became Prime Minister, was unlikely to have a material impact on Weir. Less than 2% of group revenue is generated in the EU, he said.

Shares in Weir closed down 4.4%, or 69p, at 1,492.5p.