UpdateJohnson Matthey’s Q1 pre-tax profit rises by 1.7%, sales up 6%

25 July 2012 11:25  [Source: ICIS news]

(adds detail on segment earnings)

LONDON (ICIS)--Johnson Matthey’s underlying profit before tax rose by 1.7% year on year to £99.9m ($156m, €128m) in its fiscal first quarter beginning 1 April 2012, on the back of higher sales, the UK-based specialty chemicals firm said on Wednesday.

Sales, excluding revenues from precious metals, totalled £657m in the quarter, up 6% from the corresponding period the year before, the company said in an interim management statement.

“Good growth in operating profit from our environmental technologies and fine chemicals divisions was offset by a substantial reduction in operating profit from precious metal products division which was particularly impacted by the effect of lower precious metal prices,” said Tim Stevenson, chairman of Johnson Matthey.

“As a result, the group’s underlying profit before tax was £99.9m (Q1 2011/12: £98.2m),” he added.

Sales from the group’s Environmental Technologies during the quarter grew 12% year on year to £465m and operating profits were “well ahead of last year,” Johnson Matthey said without going into detail.

“Emission Control Technologies’ (ECT’s) sales were 11% up at £370m. Sales of light duty vehicle catalysts grew well in North America and Asia, but were marginally lower in Europe. Our heavy duty diesel catalyst sales grew strongly, with good growth in North America but sales were lower in Europe,” the company added.

Johnson Matthey’s Precious Metal Products division “was significantly impacted by lower precious metal prices”, the company said, with sales during the quarter down 8% year on year at £139m.

“These [metal prices] have fallen substantially over the last nine months in response to the uncertain macroeconomic environment, particularly in Europe,” it said.

“As a consequence of lower metal prices, intakes in our refining businesses were also down by around 20% in the first three months of 2012/13,” the company added.

Sales in Johnson Matthey’s Fine Chemicals division were flat compared with the same period the year before at £69m, however the division achieved good growth in operating profit, it said.

Looking ahead, the company expects demand for the group’s products to be steady, with growth in North America and Asia offsetting “softer” European markets.

“If market conditions and precious metal prices remain as they are today, the outlook for the group in the second quarter of 2012/13 is expected to be broadly similar to that of the first quarter,” Stevenson said.

“For the year as a whole, we expect that growth in environmental technologies and fine chemicals divisions will be offset by continued weakness in precious metal products division,” he added.

($1 = £0.64, €1 = £0.78)

By: Franco Capaldo
+44 (0)20 8652 3214

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