Mining specialist Weir Group has reported a 15% increase in original equipment orders for the quarter, marking the first positive growth since the first quarter of last year.
The FTSE 100 company's cost-cutting programme is progressing rapidly, with £19m of cumulative savings achieved to date, according to its quarterly trading update, as reported by .
This puts the firm "firmly" on track to deliver £60m in savings by 2026. In August, Weir Group secured a £53m contract for the Reko Diq copper-gold project, a greenfield development half-owned by Barrick and located in Pakistan's Balochistan province.
The project aims to start production in 2028 and is expected to have a lifespan of over 40 years. Additionally, Weir secured £25m in orders from Moroccan state-owned phosphate rock miner OCP for its greenfield phosphate projects.
"We are capitalising on growing interest for our sustainable solutions with major orders received for the Reko Diq project and the OCP expansion as well as good momentum on brownfield projects, said Weir Group CEO Jon Stanton."
said Weir Group CEO Jon Stanton. "These orders demonstrate Weir's mining technology leadership and our unique opportunity to provide transformative solutions for sustainable mining as the energy transition gathers pace."
Weir maintained its 2024 guidance of revenue and operating profit growth, with an expected operating margin of 18% and free operating cash conversion of between 90 to 100%.
Shore Capital analysts Akhil Patel and Tom Fraine commended the company for its "greater resilience, lower volatility, higher earnings quality, 300bps+ operating margin improvement/expansion, improved cash generation metrics and a stronger balance sheet".
"We believe the current valuation does not reflect the higher-quality business" following its divestment of its oil and gas business, the analysts further stated.
"Aftermarket orders were in line with our expectations and reflect high levels of activity in core mining markets with the mine specific factors seen in H1 moderating," Stanton also commented.
