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Johnson Matthey PLC on Wednesday said it swung to profit in the first half of its financial year, though revenue fell due to lower average platinum group metal prices.
The London-based speciality chemicals company said it returned a pretax profit of £188 million in the six months to September 30, from a £4 million loss a year ago.
Revenue, however, fell 14% to £7.33 billion from £8.50 billion. Johnson Matthey said the revenue fall was down to weaker average PGM prices.
The swing to profit was aided by the non-repeat of a £314 million impairment charge booked a year earlier in relation to the battery materials unit.
It made the decision to sell all or parts of the unit. That process is still ‘ongoing’, the company said.
Sales excluding precious metals rose 10% to £2.05 billion from £1.86 billion.
It said it expected its PGM Services operating performance in the second half to be stronger if PGMs remained at the current price. It also said the unit will be boosted by increased efficiencies and cost inflation recovery measures.
Johnson Matthey declared an unchanged interim dividend of 22 pence to its shareholders.
Johnson Matthey added it expected its financial 2023 performance to be in line with an underlying operating profit consensus range between £458 million to £516 million, based on current foreign exchange rates continuing for the rest of its financial year.
It added it observed a significant acceleration towards a net-zero carbon economy, driven by geopolitical developments from the Russian invasion of Ukraine. It is therefore committed to investing in its sustainable technology portfolio, noting the US Inflation Reduction Act as the ‘largest climate package in US history’.
Johnson Matthey said it experienced £80 million in cost inflation arising from the macroeconomic climate, recovering £40 million from customers.
Shares in Johnson Matthey were down 2.6% to 1,981.00 pence in London on Wednesday morning.
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