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(Sharecast News) - Johnson Matthey reported half-year results in line with expectations on Wednesday, with revenue falling 14% to £7.33bn, as underlying sales rose 5% to £2bn.
The company said its underlying operating profit fell 30% to £222m, which it put down to supply chain constraints in 'Clean Air', lower average PGM prices and a lag in recovering cost inflation.
Underlying earnings per share were 25% lower at 88.2p, due to the lower underlying operating profit.
Johnson Matthey said its free cash flow came in at £133m, compared to £190 million in the prior year, largely reflecting lower underlying operating profit and working capital movements.
The board described the balance sheet as "strong", with net debt of £963m and a net debt-to-EBITDA ratio of 1.5x.
It approved an interim dividend of 22p per share, keeping it stable year-on-year.
"We are focused on effectively navigating the near-term macroeconomic challenges affecting our business, including significant cost inflation which we partially recovered in the half," said chief executive officer Liam Condon.
"We are confident of delivering a stronger performance in the second half as we apply the enhanced commercial focus and efficiencies that I outlined back in May.
"Over the past six months, there have been further positive developments in the transition to net zero."
Condon said legislation such as the Inflation Reduction Act in the US, as well as the urgent need for sources of clean energy in Europe, were driving demand for sustainable technology.
"We are in a strong position to benefit and enable our customers to decarbonise and meet their net zero goals.
"As we move to a faster paced, more customer focused culture, we are already making good progress in achieving our strategic milestones.
"You can expect to see further progress in the coming months and I am more convinced than ever of the tremendous opportunities ahead for Johnson Matthey."
At 0932 GMT, shares in Johnson Matthey were down 2.85% at 1,975p.
Reporting by Josh White for Sharecast.com.
