06 June 2013 10:31 [Source: ICIS news]
LONDON (ICIS)--Johnson Matthey reported on Thursday a 9% fall in underlying pre-tax profits for its 2013 financial year to £389.2m (€457.9, $598.8m), as a poor performance by its precious metals business and constrained growth for its fine chemicals division wiped out gains for its environmental services business.
Sales were stable year-on-year at £2.7bn, but the figure excludes precious metals sales, which were down 6% compared to 2012, and revenue for the year was down 11% to £10.7bn). The UK-based specialty chemicals firm’s financial year runs to 31 March.
CEO Neil Carson said: “Johnson Matthey had a challenging year, but nevertheless we remain very well positioned to grow our business over the medium and long term. After two very strong years, continued growth in [the] Environmental Technologies Division in 2012/13 was more than offset by a poor performance from our Precious Metal Products Division."
Underlying operating profit for the company’s fine chemicals division grew 2% year on year to £71.1m, despite falls of 2% and 3% for revenues and sales respectively. However, the company noted that the division’s performance had been impacted by “increased competition in the UK regulated market”.
Johnson Matthey derives 71% of its fine chemicals sales from its API Manufacturing businesses, based in Edinburgh, Scotland, and the northeast US. API had a “challenging” year, the company said, with sales down 4%.
As a result, Johnson Matthey said that it has taken steps to restructure API, with the £14.2m cost of the process excluded from the division’s figures.
Carson referred to the next year as one of “transition”, but said that global trends are likely to underpin accelerating growth in the medium-term.
“Overall, we expect that the group will make steady progress in 2013/14,” he said.
“In the medium term, growth is expected to accelerate in 2014/15 and beyond, driven particularly by tighter vehicle emissions legislation and demand for process technologies’ products, especially in China,” he added.
Investment bank JP Morgan Cazenove noted that the company’s results for the year had beaten analyst forecasts, and that performance was likely to gradually improve over the next two years.
“We expect that the group will make steady progress in 2013/14. In the medium term, growth is expected to accelerate in 2014/15 and beyond,” the firm said in an analyst note.
(€1 = £0.85, $1 = £0.65, $1 = €0.76)
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