UK’s Johnson Matthey sees higher profits

City A.M. Reporter
JOHNSON Matthey, the world’s largest supplier of catalytic converters, said its first-half performance should be significantly ahead, after a 19 per cent rise in first-quarter profit.

The British chemicals company said underlying profit before tax rose to £98m in the three months to the end of June, on the back of a 12 per cent rise in sales, benefiting from higher demand for products including truck catalysts.

Johnson Matthey’s key environmental technologies division saw a 14 per cent rise in sales in the quarter and a “similar” improvement in operating profit, as lower profit from its light duty catalyst business -- hit by disruption caused by the Japanese earthquake and tsunami and by rising rare earth prices -- was “more than” offset by strong demand for heavy duty diesel catalysts.

“Demand for the group’s products and services remains robust. The outlook for the second quarter of 2011-12 is good and as a result the group’s performance in the first half of the year is expected to be significantly ahead of the same period in 2010-11,” chairman John Banham told shareholders at Johnson Matthey’s AGM yesterday.

“We currently anticipate that our good start to 2011-12 will be maintained throughout the year.”

“If you take into account the macroeconomic uncertainty which has [prompted] some other chemicals companies to be very conservative in their outlook, I think this is positive,” analyst Pieter Zwinkels at RBS said.

“The second half is still uncertain but they are not negative, which indicates consensus is realistic for now, and that should be read as a positive.”

Shares in Johnson Matthey rose four per cent yesterday.