UK's Johnson Matthey misses full-year revenue estimates on lower precious metal prices
Rewrites throughout with details, background, share moves and CEO comments
By Echha Jain
May 23 (Reuters) -Johnson Matthey JMAT.L (JM) missed market expectations for full-year revenue and pretax profit on Thursday, hurt by lower prices for platinum group metals, although the company expects that to remain stable in the near-to-medium term.
The centuries-old British firm, which traces its roots back to testing the purity of precious metals, posted a 14% drop in its full-year revenue to 12.84 billion pounds ($16.32 billion).
It missed company-compiled estimates of 13.79 billion pounds on average.
PGM prices fell last year as automotive and industrial users bought more metal than they needed during 2020-2022 to mitigate price and supply risks and had been using up the excess inventory.
Prices, however, stabilised in the second half of the year and the company expects them to remain stable in the near-to-medium term, it said.
JM reported a 12% drop in underlying profit before tax to 326 million pounds and also missed analysts' average estimate of 332.1 million pounds.
Shares in the company dropped as much as 5% earlier in the day but recovered losses and were last down 0.7% at 0909 GMT.
JM upgraded its cost savings target to 200 million pounds by the end of 2024-25. It had started a cost-cutting programme in 2022 to save 150 million pounds in expenses per year by 2024-25.
The firm has raised prices of products and cut costs by axing hundreds of jobs and shutting down manufacturing sites to protect profit and offset the impact of lower precious metal prices and currency swings.
Overall, the company expects "at least mid-single digit growth in operating performance", excluding its divested Value Businesses for 2024-25 at constant precious metal prices and constant currency.
JM also indicated further price hikes this year, with CEO Liam Condon saying, "We're experiencing inflation which we need to pass on to our customers that will inevitably involve price increases in certain areas".
($1 = 0.7867 pounds)
Reporting by Echha Jain in Bengaluru; Editing by Janane Venkatraman
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