Volumes at Johnson Matthey hit by Amplats shake-up

Speciality chemicals group Johnson Matthey reported that both sales and profits fell in the third quarter, while the outlook for the rest of the year remains mixed.

"In a difficult market environment during the quarter, trading across the group was challenging," the firm said in a statement covering the three months to December 31st.

Sales excluding precious metals (sales) were down 2.0% at £635m during the period. Meanwhile underlying profit before tax slumped 19% to £84.3m, mainly due to a change in the sales mix and lower volumes in Precious Metals.

Johnson Matthey, the world leader in platinum distribution and the sole marketing agent for Anglo American Platinum (Amplats), said that the fall in volumes was partly attributable to Amplats's current restructuring programme announced earlier this month, in which is said that it would close several mines in South Africa.

The chemicals group said that while platinum prices have risen as a result of the shake-up at Amplats, the planned reduction in mining volumes will "impact" its business.

"The results for this division in the second half of the year are therefore expected to be slightly ahead of the first half but substantially lower than the second half of last year."

Mixed outlookThe outlook for the Environmental Technologies division is "stable", with the company expecting to perform better in the second half than the first. Weak trading in Europe and Japan will continue but should be offset by "promising prospects" in the US.

Meanwhile, the underlying performance of the Fine Chemicals division is expected to slip in the second half.

"The group's steady underlying performance is expected to continue for the rest of the financial year and, in line with the guidance in our half year report, we continue to anticipate that the group's performance in the second half will be similar to that for the first six months of the year," the company said.