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Home > Supplier Companies > Weir Minerals > News > Q1 2021 Trading Update
Weir Minerals

Q1 2021 Trading Update

Apr 29, 2021

Main Headlines:
 
  • Increase in Group orders2 from continuing operations3 of 11%
  • 67% increase in original equipment (OE) orders with project pipeline strength continuing
  • Aftermarket (AM) orders down 2% reflecting residual Covid disruption to ore production
  • Up 7% sequentially from Q4 2020 as activity continued to normalise
  • Revenues stable reflecting highly resilient AM performance and OE project timing
  • Pipeline and bid conversion developing positively, particularly for sustainable solutions
  • £36m Q1 order for energy-saving High Pressure Grinding Rolls (HPGRs) and screens
  • £32m April order for electric-powered mine de-watering pumps
  • 2021 Outlook: Growth in constant currency profits in line with current market expectations
 
Jon Stanton, Chief Executive, commented:
 
“The Group has had a good start to the year against the backdrop of ongoing Covid challenges.  As expected, conditions continued to improve in both mining and infrastructure markets reflecting increasing customer confidence in a broad-based economic recovery and near record prices for commodities essential to growth and carbon transition.  This was reflected in continued positive development in our project pipeline and improving order conversion of our early cycle product lines and technologies that deliver significant sustainability benefits.
 
Looking to the full year, we continue to expect to deliver growth in full year constant currency profits in line with current market expectations.”
 
First quarter review – Continuing Operations
 
Conditions in mining markets continued to improve in the first quarter supported by commodity prices that remained close to multi-year highs for the Group’s largest exposures of copper, iron ore and gold.  Customers focused on maximising production and as a result, ore production volumes and machine utilisation continued to normalise, although remained below pre-Covid levels in some regions where the ongoing pandemic is restricting customer staffing levels.  Demand was strongest in North America, Central Asia and Africa, but more subdued in Asia-Pacific and South America, with Australia affected by adverse weather and Chile by the build-up of safety stocks in Q1 2020 as the Covid-19 pandemic started to have an impact.  Third-party access to sites improved overall, particularly in those regions with advanced Covid-19 vaccination programmes and low infections levels, but access remains an ongoing issue in some markets.  Project quotation activity continued to be strong and while the rate of conversion remained slower than usual there was an acceleration in orders for our longer-lead time and therefore earlier cycle technologies such as GEHO® positive displacement pumps and Enduron® HPGRs.  This was principally focused on brownfield expansions across a range of commodities, with greenfield activity remaining more limited. 
 
Infrastructure markets, particularly sand and aggregates in North America and Europe, began to recover strongly as economic confidence increased and this was reflected in higher activity levels and restocking in third party distribution channels.
 
Group orders in the first quarter were up 11%, driven by OE which increased 67%, benefiting from a large order to supply energy-efficient HPGRs and screens to support the expansion of Ferrexpo’s iron ore operations in the Ukraine. As expected, AM demand was down slightly against the prior year period, reflecting residual Covid disruptions, although continued to increase sequentially, up 7% on Q4 2020.  The Group’s book-to-bill was strong at 1.22, reflecting positive demand trends.
 
Operationally the Group continued to prioritise safety and well-being with ESCO making further meaningful progress in the first quarter.  We have now completed plans for ESCO’s new China foundry which will break ground in Q3, while Minerals upgraded its Australian foundry as part of our global initiative to optimise production of our largest castings.  Our focus on sustainable solutions continues and we are now developing our CO2 product footprint tool for deployment later this year. There are now c.150 programmes underway across the Group to reduce energy, water and waste as part of our 2024 sustainability commitments and we remain on track to complete our Scope 3 study and first evaluation of Science Based Targets and Net Zero pathways in 2021.  We are continuing the roll-out of our field-service technology to enhance delivery of on-site engineering and increase our installed base data.  We also launched our new global learning system which will allow the accelerated deployment of training in areas such as safety, lean and sustainability. 
 
Notes:
 
1. Financial information is given for the three months ended 31 March 2021 and relates to continuing operations.
2. Orders are reported on a constant currency basis at Q1 2021 average exchange rates.
3. Continuing Operations excludes the Oil & Gas division which was sold on 1 February 2021.
 

Source: https://www.global.weir/newsroom/news-articles/q1-2021-trading-update/

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