Resources industry engineer Weir (WEIR) continues to investigate options to rid itself of its Oil & Gas division. Moving away from oil is a long-term strategic decision but the exit has become more urgent given the impact on workloads in the wake of the Covid-19 crisis.

Weir said the Oil & Gas division had seen a ‘significant step-down’ in North American activity levels in the three months through June.


The company said that cost mitigation actions have been successfully executed and it still expects the division to be cash generative for the full year 2020, but the chances of offloading the Oil & Gas division for a decent price looks doomed for the time being.

Brent crude prices have plunged by a third this year, even after the strong rally since early April, slamming the brakes on investment and maintenance projects around the world.

‘Given the current circumstances, we believe, in the short to near-term, it would be difficult to crystallise any value from the Oil & Gas disposal until the market backdrop has improved,’ said analysts at broker Shore Cap in February.


Weir today confirmed that it is willing to bide its time, ‘continuing to explore options to maximise value from the division at the right time.’

Orders in the mineral division will help offset some of the damage to full year revenue and profits, but it too faces tough comparisons from a ‘particularly strong second quarter in 2019, which was an all-time record.’

Weir said that orders had remained stable in the second quarter, with margins in a normal range, news that will come as a relief to many investors.

Shares in the FTSE 250 business rallied 6.5% on Friday to £11, their highest since before the coronavirus pandemic lockdown.

The company also announced that it had refinanced a S$950 million revolving credit facility and £200 million term loan, extending maturities to 2023 and 2022, respectively.


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Issue Date: 26 Jun 2020