* Operating profits decline 7 percent
* Oil and gas division input grows by 40 percent on U.S.
* Mining hit by South Africa strikes
(Recasts, updates throughout)
By Ron Bousso
LONDON, July 31 British engineering firm Weir
Group reported on Thursday a 7 percent fall in
first-half operating profits as the impact of a strong pound
outweighed a booming U.S. shale business.
Weir, which makes pumps and valves for the mining, oil and
gas industries, saw 10 percent growth in orders to 1.24 billion
pounds in the period ended July 4.
Operating profits were down 7 percent to 201 million pounds.
Earnings per share fell 8 percent to 61.4 pence while its
share dividend rose 70 percent to 15 pence, which will represent
around one third of its full year dividend.
Weir shares were down 3.19 percent at 2,585 pence at 0747
GMT, compared with a 0.87 percent decline in the oil and gas
"Healthy orders and revenue are encouraging but the margin
performance is slightly concerning," said Matthew Spurr, analyst
at Espírito Santo Investment Bank.
The value of new business in Weir's oil and gas division,
which has a strong position in U.S. shale, rose 40 percent to
499 million pounds as the recovery in the North America market
Growth was focused mostly on the unconventional shale oil
production, known as fracking, in the oil rich oil basins,
particularly the Permian.
Operating profits in the oil and gas division was up 27
percent at 98 million pounds. Full year margins are expected to
be in line with expectations, Weir said.
The minerals division continued to be challenged by the weak
condition in the sector, with equipment orders slumping 27
percent year-on-year, "reflecting the absence of greenfield
projects and customer caution in committing to brownfield
Growth in the sector was expected to continue to be impacted
by the metalworkers strike in South Africa, which closed Weir's
manufacturing operations and resulted in an estimated 3 million
pound loss in July.
"We anticipate strong revenue and profit growth in the
second half of 2014, assuming no further deterioration or
disruption in mining end-markets," Chief Executive Keith
Cochrane said in a statement.
(Reporting by Ron Bousso; editing by Jason Neely and John