Engineering company Fenner warned that full-year profits will be lower than expected and said there are no signs of recovery in its key mining and energy industries.
The Hessle-based group said that it expects recent challenging market conditions to continue.
The company has been hit by a fall in demand for its conveyor belts from coal customers who are themselves having to deal with a fall in coal exports. The group said that despite the gloomy outlook, it was encouraged by the way in which its conveyor belt and oil and gas businesses are responding to cost cuts.
As part of this, Fenner has reduced its headcount in the UK and China.
As previously announced, the group has made around 50 staff redundant at its Fenner Dunlop plant in Hull, which previously employed 127.
Fenner said it expects to see a strong performance from the industrial, medical and other non-oil businesses of its Advanced Engineered Products division and trading for the division as a whole should be in line with expectations.
Analysts at Investec said in a note: “Advanced Engineered Products shows a mixed picture with weakness in oil-related areas, as expected, and robust demand elsewhere. Engineered Conveyor Solutions is a different story, with bad news almost everywhere. While the bulk materials business is holding up, virtually every natural resource-related niche is under pressure.”
Investec said volumes and pricing continue to deteriorate in Australia and US coal volumes are still declining.