(Alliance News) - Speciality chemicals firm Johnson Matthey PLC on Thursday posted a fall in interim profit as it saw weaker demand in its Clean Air segment.
Revenue for the six months to September 30 rose 2% to GBP6.80 billion, but pretax profit slumped 88% to GBP26 million. The fall in profit was driven by lower demand in the Clean Air segment, which mostly serves car makers, and major impairment and restructuring charges of GBP78 million.
Underlying pretax profit still fell sharply, down 53% to GBP109 million.
Johnson Matthey said that following "temporary disruption" in its Clean Air unit earlier in the year, it is seeing a strong recovery in demand across all regions, especially in China. Clear Air underlying operating profit was down 57% to GBP77 million in the half.
London-headquartered Johnson Matthey declared an interim dividend of 20.0 pence, down from 24.5p a year ago.
"The board remains committed to a progressive dividend and anticipates restoring future dividend payments to levels seen prior to the Covid-19 pandemic when circumstances permit," the company said.
Looking ahead, Johnson Matthey noted that activity in autos and other key markets has improved since the pandemic began and it expects a "materially" stronger second half versus the first.
The global outlook for autos has improved, the company noted, with data now suggesting European and US automotive production could be down 20% in the financial year ending in March, compared with the previous estimate of down 25%, and China is seen above the prior year.
In Efficient Natural Resources, the full-year operating performance is expected to be below the prior year, although Johnson Matthey expects the "usual seasonality and a stronger second half".
The company added that is it making "good progress" against its targeted annualised cost savings of GBP225 million. Johnson Matthey is on track to deliver expected benefits of GBP59 million in the year ending March 31.
Shares in Johnson Matthey were up 0.7% at 2,567.00 pence in London on Thursday.
By Lucy Heming; lucyheming@alliancenews.com
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Johnson Matthey (JMAT)