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UPDATE 1-Johnson Matthey Q1 profit given European truck boost
July 25, 2013 / 9:41 AM / 4 years ago

UPDATE 1-Johnson Matthey Q1 profit given European truck boost

* Underlying profit before tax 106 million pounds

* HDD sales lift key ECT division sales 9 percent

LONDON, July 25 (Reuters) - Catalyst maker Johnson Matthey’s profits rose 8 percent in the first quarter of its financial year, boosted by stronger sales of catalysts for trucks in Europe before new environmental regulations take force.

The group said underlying profit before tax came in at 106 million pounds ($162.8 million) in the three months, at the higher end of analyst expectations. Sales rose 13 percent to 745 million pounds, also stronger than forecast.

Johnson Matthey, the world’s largest maker of catalysts that control vehicle emissions, has been hit by the impact of weaker metals prices on its division that refines, markets and distributes platinum and other precious metals.

That has been offset by progress in the division that makes catalysts for cars, trucks and the chemicals industry. That key division, Emission Control Technologies, saw sales up 9 percent, with heavy duty diesel catalyst sales up 15 percent.

“This is quite a strong start to the year but it’s also seasonally strong for them,” said analyst Evgenia Molotova at Berenberg in London. “It’s a very solid performance but I don’t expect strong upgrades based on their results.”

Robert MacLeod, Johnson Matthey’s finance director, said sales of heavy duty diesel catalysts in Europe alone grew 46 percent - boosted by what he said was customers buying up or building before Euro 6 regulations that apply to all diesel trucks from the start of next year.

These accounted for around 25 percent of European HDD sales.

The market for HDD catalysts - in which Johnson Matthey has a share of more than 50 percent - is expected to roughly double to $2.1 billion in the next three years, as tougher rules are brought in. MacLeod predicted a gradual increase in sales through this calendar year.

The group’s process technologies division, which manufactures speciality catalysts, was lifted by the acquisition of formaldehyde producer Formox in March and saw sales up 19 percent in the quarter.

Meanwhile, sales in the precious metals unit rose 3 percent - thanks to good volumes at its refineries for platinum group metals and despite lower average precious metals prices.

In the statement before its annual shareholder meeting, Johnson Matthey said it expected a slightly weaker performance in its second quarter, due to summer shutdowns in the auto industry, but maintained guidance for the full year.

Johnson Matthey shares were down 1 percent at 0900 GMT, not far behind a a 0.7 percent drop in the FTSE 100.

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