* Underlying profit before tax 106 million pounds
* HDD sales lift key ECT division sales 9 percent
LONDON, July 25 (Reuters) - Catalyst maker Johnson Matthey's profits rose 8 percent in the first quarter of itsfinancial year, boosted by stronger sales of catalysts fortrucks in Europe before new environmental regulations takeforce.
The group said underlying profit before tax came in at 106million pounds ($162.8 million) in the three months, at thehigher end of analyst expectations. Sales rose 13 percent to 745million pounds, also stronger than forecast.
Johnson Matthey, the world's largest maker of catalysts thatcontrol vehicle emissions, has been hit by the impact of weakermetals prices on its division that refines, markets anddistributes platinum and other precious metals.
That has been offset by progress in the division that makescatalysts for cars, trucks and the chemicals industry. That keydivision, Emission Control Technologies, saw sales up 9 percent,with heavy duty diesel catalyst sales up 15 percent.
"This is quite a strong start to the year but it's alsoseasonally strong for them," said analyst Evgenia Molotova atBerenberg in London. "It's a very solid performance but I don'texpect strong upgrades based on their results."
Robert MacLeod, Johnson Matthey's finance director, saidsales of heavy duty diesel catalysts in Europe alone grew 46percent - boosted by what he said was customers buying up orbuilding before Euro 6 regulations that apply to all dieseltrucks from the start of next year.
These accounted for around 25 percent of European HDD sales.
The market for HDD catalysts - in which Johnson Matthey hasa share of more than 50 percent - is expected to roughly doubleto $2.1 billion in the next three years, as tougher rules arebrought in. MacLeod predicted a gradual increase in salesthrough this calendar year.
The group's process technologies division, whichmanufactures speciality catalysts, was lifted by the acquisitionof formaldehyde producer Formox in March and saw sales up 19percent in the quarter.
Meanwhile, sales in the precious metals unit rose 3 percent- thanks to good volumes at its refineries for platinum groupmetals and despite lower average precious metals prices.
In the statement before its annual shareholder meeting,Johnson Matthey said it expected a slightly weaker performancein its second quarter, due to summer shutdowns in the autoindustry, but maintained guidance for the full year.
Johnson Matthey shares were down 1 percent at 0900 GMT, notfar behind a a 0.7 percent drop in the FTSE 100.
Johnson Matthey (JMAT)
