Bloomberg News

Johnson Matthey’s Profit Rises 43%, Sees Better Second Half

November 24, 2011

(Updates with closing share price in final paragraph.)

Nov. 23 (Bloomberg) -- Johnson Matthey Plc, the producer of a third of all autocatalysts, reported a 43 percent increase in fiscal first-half profit and said it expects earnings to be “slightly ahead” in the current six-month period.

Net income for the half through September rose to 149.4 million pounds ($233 million) from 104.7 million pounds a year earlier, the London-based company said in a statement today. Sales climbed 29 percent to 5.9 billion pounds.

Johnson Matthey, which produced the world’s first catalysts for curbing pollution in 1974, benefited from growing demand in the first half as international car sales gained 2 percent. It’s also seeing increased use of heavy-duty diesel models for trucks and buses in a market set to expand threefold through 2015, according to company estimates.

“The short-term prospects for the global economy are difficult to predict,” it said in the statement. “Nonetheless, we believe that Johnson Matthey is well placed and we currently anticipate that the group’s results in the second half will be slightly ahead of those for the first six months of the year.”

Earnings will be buoyed as rare-earth costs are passed on to customers, leading to operating profit at the Environmental Technologies division “well ahead” of the first half. Those costs cut profit by about 15 million pounds in the first half.

Demand for light-duty vehicles is “reasonable” in Asia and the U.S. with some “concern” about the European market, Finance Director Robert Macleod said in a phone interview.

“We’ve seen some early signs of a little bit of softness particularly in southern Europe, but northern Europe so far has been OK,” he said.

Johnson Matthey fell 1.2 percent to 1,749 pence by the close of trading in London, giving the company a market value of 3.75 billion pounds.

--Editors: John Viljoen, Alex Devine

To contact the reporter on this story: Thomas Biesheuvel in London at tbiesheuvel@bloomberg.net.

To contact the editor responsible for this story: John Viljoen at jviljoen@bloomberg.net


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