UK's Weir Group H1 revenue rises 5% on demand in copper market
UK's Weir Group H1 revenue rises 5% on demand in copper market
Overview
UK mining equipment supplier's H1 revenue rose 5%, slightly beating analyst expectations
Adjusted operating profit margin fell to 18.8% from 19.8% on product mix and production delays
Company H1 orders up 8% year-on-year, driven by mining sector demand
Outlook
Weir expects constant currency growth in full-year revenue, operating profit and margins
Company sees mid-single-digit organic revenue growth in H2, with increased aftermarket mix
Weir forecasts full-year free operating cash conversion of 90% to 100%
Result Drivers
MINING SECTOR DEMAND - Co said strong orders were driven by demand in copper, gold, iron and oil sands markets
PRODUCTION TRANSFER DELAYS - Revenue growth was partially offset by extended lead times following delays in production transfers
PRODUCT MIX IMPACT - Adjusted operating profit margin declined due to short-term product mix and operational delays
Company press release: ID:nRSc2619Oa
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
H1 Revenue | Slight Beat* | GBP 1.27 bln | GBP 1.26 bln (4 Analysts) |
H1 Adjusted Operating Profit | Slight Miss* | GBP 239 mln | GBP 239.83 mln (1 Analyst) |
H1 Adjusted Pretax Profit | Beat | GBP 196 mln | GBP 174 mln (2 Analysts) |
H1 Orders |
| GBP 1.43 bln |
|
*Applies to a deviation of less than 1%; not applicable for per-share numbers.
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 13 "strong buy" or "buy", 7 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the industrial machinery & equipment peer group is "buy"
Wall Street's median 12-month price target for Weir Group PLC is GBp3,265.00, about 29.4% above its July 28 closing price of GBp2,524.00
The stock recently traded at 18 times the next 12-month earnings vs. a P/E of 20 three months ago
Reuters Recommended Reads
July 29 - Rio Tinto posts highest first-half earnings in four years as data centre boom boosts copper
July 28 - Kumba Iron Ore first-half profit drops 41%, targets more ex-China sales
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)