28th Jan 2015 10:37
LONDON (Alliance News) - Johnson Matthey PLC Wednesday stuck with its full-year guidance, after reporting a 1% increase in its pretax profit before exceptional items in the third quarter of its financial year, buoyed by strong sales from its emission control technologies business.
In a statement, the emissions and process technology company said pretax profit excluding impairments, restructuring charges, tax changes and any profits or losses on disposals was GBP96.5 million in the three months to end-December, up from GBP96.0 million a year earlier. The growth was capped after it lost about GBP10 million in commission income from Anglo American Platinum. Excluding this, its underlying pretax profit grew at a double-digit rate.
Sales rose 5% to GBP745 million, from GBP708 million a year earlier, with growth in emission control technologies and new businesses offsetting declines in precious metal products and fine chemicals.
Emission control technology sales rose by 9% year on year during the third quarter to GBP435 million from GBP397 million, and operating profit was also up.
Its emission control technology sales benefited from a 5% increase in light duty catalysts, which contributed GBP266 million in revenue during the third quarter. Heavy duty catalyst sales also rose by 16% to GBP169 million. It said the growth in sales was mainly driven in Europe and the US.
Process technology sales remained flat from a year earlier, but increased sales of less-profitable products meant operating profit was "significantly lower".
Johnson Matthey's new business sales jumped 13% to GBP23 million from GBP21 million.
Sales of precious metal products fell 3% to GBP92 million from GBP95 million, driven by the loss of commission revenue from Anglo Platinum. Johnson Matthey said that it is expecting to conclude the sale of its gold and silver refining business to Asahi Holdings Inc for GBP118 million in March.
In the first half of its financial year, Johnson Matthey agreed to modify its contract with Anglo Platinum, leading to a big drop in commission.
Fine chemical sales also dropped to GBP73 million in the quarter, from GBP76 million. The decrease was caused by lower demand for bulk opiates and pain management active pharmaceutical ingredients in Europe, despite other sales remaining steady.
"The outlook for the divisions in the current financial year remains unchanged from that given in our half-yearly report. Consequently, we continue to expect the group's underlying profit before tax in 2014/15 to be slightly ahead of 2013/14, despite the adverse impact from the loss of commission revenue from Anglo Platinum in the first three quarters of the year and the effect of foreign currency translation in the first half," the company said in its trading statement.
Johnson Matthey reported an underlying pretax profit of GBP406.6 million in fiscal 2014, up from GBP382.9 million in fiscal 2013.
Still, Johnson Matthey shares were down 6.6% to 3,266.00 pence per share on Wednesday morning, the worst performing stock on the day in the FTSE 100.
By Steve McGrath and Joshua Warner; [email protected]; @stevemcgrath1; [email protected]; @JoshAlliance
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