Johnson Matthey sales slip but full year outlook in line

Specialty chemicals company Johnson Matthey reported a drop in third quarter sales but said its full year outlook remains in line with market expectations despite challenging conditions.

For the quarter ended 31 December, sales nudged down to £736m from £745m the previous year. Group sales from continuing businesses, excluding the contribution of its gold and silver refining and research chemicals businesses, were up 3%.

Sales at the emission control technologies division, which is one of the biggest contributors to the group’s earnings, were up 6% to £459m, but the process technologies unit saw a drop of 11% to £119m.

“Emission Control Technologies performed well with sales growth across all regions and New Businesses continued to make good progress,” the company said.

“However, the difficult trading environments in both Process Technologies and Precious Metal Products, which we noted in our half year announcement in November, persisted in the period.”

Sales in precious metals products declined 17% to £76m but sales in the fine chemicals business rose 4% to £57m.

Johnson Matthey said macroeconomic factor such as weak oil prices and the slowdown in China meant its markets in process technologies and precious metal products remained challenging in the third quarter and the group expects this to continue for the rest of the year.

However, the company said it expects to deliver a strong final quarter, in line with its normal seasonality and benefiting from previously announced restructuring actions.

In addition, it reckons the underlying performance for the continuing businesses in the second half will be slightly ahead of the first and said the full year outlook is in line with current market expectations.

At 0907 GMT, Johnson Matthey shares were up 1% to 2,451p.