Shares in Johnson Matthey PLC (LSE:JMAT), the FTSE 100-listed chemicals group, fell 3.6% to 1,795p after it reported a 21% fall in annual profits.
The maker of catalytic converters and hydrogen technologies said it expects to return to growth this year, helped by green subsidies in the US and Europe.
Precious metal prices remain key, as lower platinum group metals (PGM) prices led to a 7% decline in total revenue to £14.9bn in the year to end-March 2023.
Higher selling prices to recover cost inflation, partly undermined by the lower PGM price, saw underlying sales rise 6% to £4.2bn but underlying operating profit shrank by just over a fifth to £465mln.
Half the fall in profits was due to lower average PGM prices with the remainder due to cost inflation and lower sales volumes.
A 55p final dividend means the payout remains flat at 77p per share for the year.
For the current year, management expects “at least mid-single digit growth” in operating profit, based on constant precious metal prices and constant currency.
It said the volatility in precious metal prices makes it difficult to predict how they may develop, with prices remaining at their current level for the remainder of the year resulting in a £50mln adverse impact on operating performance compared with the prior year.
The Clean Air, which makes automobile catalytic converters, and Catalyst Technologies divisions are both expected to deliver a strong operating performance.
Sales are expected to grow strongly in Hydrogen Technologies, with a similar operating loss as the past year, with breakeven anticipated next year.
"Significant opportunities" are seen for its decarbonisation products, with the company pointing to the US$370bn of incentives in the US Inflation Reduction Act and billions of euros also available from Europe's Green Industrial Deal and Net-Zero Industry Act.