(Adds currency impact in paragraph 3)
July 23 (Reuters) - Johnson Matthey, the world'sbiggest producer of automotive catalytic converters, posted an11-percent fall in first-quarter underlying profit and said itexpected a worse-than-expected impact from a stronger Britishsterling.
The UK-based specialty chemicals company said on Wednesdaythe strength of the sterling exchange rate would cut itsunderlying profit before tax this year by over 25 million pounds($42.66 million), more than the 20 million pounds it hadestimated in June.
While it has costs in sterling, and it reports its resultsin the currency, Johnson Matthey sells its productsinternationally, in several currencies.
The company also expects 30 million pounds in lostcommission revenue this year from a contract with platinumproducer Anglo American Platinum (Amplats) which cameto an end last year.
However, it maintained its flat profit growth guidance forthe year.
"Our guidance for the year as a whole remains unchanged,despite the further strengthening of sterling," Johnson Mattheysaid in a statement.
"We currently expect that the group's performance in 2014/15will be broadly in line with 2013/14, as continued growth acrossthe group will be offset by the adverse impact of both the lossof commission revenue from Anglo Platinum ...and by the effectof foreign currency translation."
First-quarter underlying operating profit fell by 11 percentfrom the same period last year to 103.6 million pounds.
Excluding the negative impact of currency exchange and thelost revenue from the Amplats contract, group sales grew 9percent.
"They have maintained the guidance, but they have done itdespite the fact that the currency exchange is costing them morethan they previously thought, so there has been a sort ofunderlying upgrade, although modest, for the guidance to besustained in that way," said Numis Securities analyst CharlesPick. "If you dig down below the raw numbers, there isunderlying growth."
Johnson Matthey's Emission Control Technology division,which makes catalytic converters for trucks and cars, grew itssales by 10 percent to 444 million pounds, boosted by highersales of trucks in the U.S. and higher demand stemming fromstricter emission control legislation, particularly in Europe.
Sales from the process technology division, whichmanufactures specialty catalysts for the chemicals and energyindustries shrank by 17 percent to 119 million pounds.
Shares in Johnson Matthey were down more than 2 percent by0750 GMT against a 0.1 percent rise in the FTSE 100.
($1 = 0.5860 British Pounds) (Reporting by Silvia Antonioli; editing by Jason Neely)
Johnson Matthey (JMAT)
