Johnson Matthey has reported a strong first half to the year but warned that it now expected its second half performance to be behind the same period last year as the global car market contracts.
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The catalytic convertor group said its first half sales were up 24% to £4.4 billion as a result of good underlying volume growth and higher precious metal prices in the first quarter
Sales excluding precious metals were up 10% at £924 million with good volume growth despite slowdown in some end markets
Profit before tax and amortisation of acquired intangibles rose 20% to £144.9m, with underlying earnings per share up 17% to 48.4 pence.
Neil Carson, chief executive of Johnson Matthey said: “Johnson Matthey performed well in the first half of 2008/09. With global car sales expected to fall in the second half we have taken action to reduce costs and protect our margins in emission control technologies. The outlook for our other catalyst businesses remains good underpinned by environmental legislation and concerns over energy security.
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By GlobalData“The long term drivers for our business remain firmly in place. With our strong balance sheet and investment in new technology the group is in a good position to weather the current economic downturn.”
However, in a statement, the company warned that with global car sales expected to show a significant decline in the second half, sales of autocatalysts are also expected to decline.
Looking ahead, Johnson Matthey said that, assuming pgm prices and exchange rates remain at current levels, and with a drop in global car production of around 11% compared with last year, it would expect underlying profit before tax for the second half of the year would be 5%-15% below the level achieved in 2007/08.
“On that basis we would expect underlying earnings per share for the year as a whole to be in the range 90p to 94p (1% – 5% up on 2007/08),” the company said.
