UK-based engineering firm Weir Group has cited encouraging mining market conditions as playing an important role in a record first quarter that saw orders rise 15%.
The record rise in group orders was partially driven by significant growth in demand for spares, with aftermarket orders up 28% year-on-year, said the company.
Original equipment orders were 17% lower than in the same period last year, said the firm, noting that in that period it booked a £34m (US$42 million) order from Ferrexpo. Adjusting for that, growth in original equipment orders was 8% in Q1 2022.
The company noted its condemnation of the Russian military invasion of Ukraine, noting that it has since taken the decision to wind down its Russian business during 2022.
In the minerals division, divisional orders increased 9% against a strong prior year comparator, while sequentially, aftermarket orders remained close to all-time highs.
Global demand for aftermarket spares remained strong, supported by a general trend towards lower ore grades and increased equipment utilisation. Demand was particularly strong within the oil sands market in Canada, supported by high oil prices through the period. In response to concerns around global supply chain challenges, some customers also built safety stocks by forward purchasing.
Demand for original equipment continued to be supported by a high volume of smaller orders for equipment for the debottlenecking of existing assets, and for small brownfield expansions.
"We continue to increase investment in technologies that will enable our customers to meet their sustainability commitments while delivering the natural resources essential for net zero. We will also continue to develop our regional vertically integrated supply chains which have been vital in delivering consistently for our customers throughout these challenging times," said the firm.
"Subject to ongoing geopolitical uncertainty, we expect to deliver strong constant currency revenue and profit growth in 2022, in line with our previous expectations adjusted for the impact of loss of sales in Russia. As previously indicated, first half margins will be lower than prior year, reflecting prior year one-off impacts and mix, with full year margins expected to show good progress towards our medium-term targets", added the interim statement.