Catalytic converter and diesel particle filter supplier Johnson Matthey said its third quarter was strong thanks to demand in its key markets with sales excluding precious metals 22% up year on year and operational leverage and higher precious metal prices boosting underlying operating profit 31%.
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“Underlying profit before tax was 34% higher than in the third quarter of last year but, in line with our normal seasonality, underlying profit before tax was slightly lower than in the second quarter of this year,” the company said in an interim statement.
Net debt increased in the quarter as working capital grew as a consequence of the strong growth in sales and higher precious metal prices.
The environmental technologies division’s third quarter sales were 21% ahead of the same period of last year and 6% higher than those in the second quarter of this year with operating profit was 14% ahead of the same period last year.
The division’s sales were boosted by higher substrate costs related to increased fitment of diesel particulate filters in Europe and growth in the heavy duty diesel market. Sales in the quarter were up 22% compared with last year driven by further growth in global light duty vehicle sales, particularly in China, and the steady recovery of heavy duty vehicle sales. Global car production was 5% ahead of both the third quarter of last year and last quarter. Heavy duty diesel truck production in North America was up 29% on last year and was 23% ahead of the second quarter.
Nonetheless the company has begun statutory formal consultation with employees in Brussels about the potential closure of the manufacturing plant there.
Precious metal products division’s sales grew 32% with operating profit 63% higher. Demand for manufactured products and catalysts has continued to grow steadily, up 28% compared with last year.
Johnson Matthey said group trading is expected to remain strong for the remainder of the year and underlying performance for the full year is therefore expected to be slightly ahead of previous expectations.
