LONDON, July 25 (Reuters) – Johnson Matthey, the
world’s largest supplier of catalytic converters, posted a
virtually flat first quarter, as the impact of lower platinum
and palladium prices offset the benefit of increased car and
truck sales in North America.
The British speciality chemicals company said on Wednesday
underlying profit before tax came in at 99.9 million pounds
($155.1 million) in the three months to end-June, against 98.2
million a year ago, on the back of a 6 percent rise in sales.
“Good growth” in profit at its key environmental
technologies and fine chemicals divisions was offset by the
effect of weaker platinum and palladium – with prices down 16
percent and 17 percent against the same period last year – on
the services business of its precious metal products arm, as
refining demand dropped.
It expects that business, which saw sales down 8 percent in
the quarter, to remain weak throughout the year, offsetting
growth elsewhere, as North American and Asian growth help
counter softer European markets, the group said.
“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,” Chairman Tim Stevenson will tell shareholders at
the group’s annual meeting later on Wednesday.
“For the year as a whole, we expect that growth in
Environmental Technologies and Fine Chemicals divisions will be
offset by continued weakness in the Precious Metal Products
division.”
The group’s core environmental technologies arm, which makes
catalysts for cars and heavy industry and accounts for almost
half group profit, saw sales in the quarter rise 12 percent and
operating profit was “well ahead of last year”, as the sale of
diesel catalysts for trucks grew strongly in North America.
The division was hit in the same period last year by
headwinds associated with higher rare earth prices and the
Japanese earthquake and tsunami.
It said the order book for the next few months was “strong”.
Johnson Matthey – which makes catalysts to convert toxic
engines emissions, sells pharmaceutical ingredients and refines
platinum – last month proposed its first ever special dividend
after posting larger than expected full year profits.
