Johnson Matthey PLC (LSE:JMAT) has reported a sharp fall in half-year profits as supply chain pressures constrained production volumes for the group's automotive customers and as prices of precious metals softened.
The FTSE 250-listed chemicals manufacturer said underlying operating profits for the six months to 30 September were £222mln, compared with £297mln last year.
Sales of £2.0 billion, were up 5%, with higher prices, to partially recover cost inflation, partly offset by lower average precious metals prices.
“The external environment is challenging, with continued political and economic uncertainty. We currently expect operating performance for the full year to be within the consensus range” the group said (range: £458mln to £516mln as of 21 November 2022).
In Clean Air, supply chain disruption has eased through the first half and, whilst there is still uncertainty, Johnson Matthey said it expects that automotive production volumes will improve further through the second half.
In PGM Services, the company cautioned that if precious metals were to remain at their current level for the rest of this year, "we would expect the adverse impact on full-year operating performance to be c.£40mln compared with the prior year."
But increased efficiencies and further measures to recover cost inflation mean operating performance in the division should be stronger in the second half than the first.
Liam Condon, the company's chief executive, commented: "You can expect to see further progress in the coming months and I am more convinced than ever of the tremendous opportunities ahead for Johnson Matthey."