Platinum prices affect Johnson Matthey’s sales

REVENUE at speciality chemicals company Johnson Matthey sank 17 per cent over the half year to September, as it was hurt by falling platinum prices.

Operating profit for the precious metals division was down 33 per cent to £71.8m, while sales were down five per cent over the half year, hurt by lower average precious metal prices.

In its first half, the average price of platinum was down 16 per cent year on year at $1,500 (£942) an ounce.

As a result, the blue chip company, which is a large supplier of vehicle catalytic converters, said that performance in the second half would be broadly flat on the first half.

“Whilst precious metal prices have improved from their lows during the summer, largely due to the labour unrest in South Africa, the outlook in some of our other markets has weakened and visibility remains limited,” Johnson Matthey said.

It added that global demand was expected to stay broadly stagnant, although supply would fall “sharply” thanks to industrial action in South Africa.

The group said pre-tax profit fell six per cent to £183.4m over the period, from £195.1m over the same period in 2011.

Outside of the precious metals division, the environmental technologies arm posted a three per cent increase in sales, with operating profit up 17 per cent over the six months.

Shares closed down 5.81 per cent at 2,190p, making it the biggest faller on the FTSE 100 yesterday.