Annual profits

Johnson Matthey expects 2021 growth despite declining annual profits

Johnson and Matthey reported underlying profit of £ 504million

Johnson matthey (LON: JMAT), the chemicals maker, forecasts low to medium growth this year due to strong demand for its autocatalytic converters and tighter pollution regulations in Asia.

The company FTSE 100 also recorded a decline in its annual profit.

Johnson and Matthey reported underlying profit of £ 504million for the year through the end of March, up from £ 539million a year earlier.

Company turnover increased by 8% on average precious metal prices.

The company said its balance sheet was in good shape, with net debt of £ 775million and net debt to EBITDA of 1.2 times.

Johnson Matthey’s share price fell 2.73% on Wednesday to 3,064 pence per share.

Ben Nuttall, senior analyst at Third Bridge, commented on the company’s results:

“Johnson Matthey’s annual results show sales excluding precious metals 5% lower than last year, mainly due to the purchase of a few cars, but slightly exceeding street expectations. The group’s CAPEX is expected to increase to £ 600 million, as investments in battery material capacity continue, ”said Nuttall.

“Johnson Matthey’s main challenge is managing the transition from internal combustion engines to battery and hydrogen powered vehicles. Compared to its competitors, Johnson Matthey’s strength in diesel catalytic converters will likely be the first to decline, and their strengths in eLNO and hydrogen are likely to take longer to materialize.

While CEO of the chemicals maker Robert MacLeod said:

“After a difficult first half, we rebounded strongly in the second half, helped by a strong recovery in our end markets and higher precious metal prices. We are implementing our efficiency program, tightly managing working capital and generating cash from our more established businesses as we continue to invest for growth, particularly in battery materials and hydrogen.

“During the year, we made good strategic progress. We have started partnering to advance eLNO commercialization and gained new customers in fuel cells. Our investment in sustainable technologies builds on our existing expertise and will enable the transformations in transport, energy, decarbonization of industry and a circular economy that the world needs to achieve net zero – transformations that are central to achieving our vision of a cleaner, healthier world for present and future generations, ”added MacLeod.

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