Johnson Matthey plans to cut 15% of managers as profit tumbles
Shares of London-listed maker of catalytic converters fall after it reported half-year profit dropped 30%
23 November 2022 - 18:44
byMuhammed Husain
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Johnson Matthey reported a 30% drop in half-year profit on Wednesday as supply chain disruption slowed production by carmakers and precious metals prices eased.
The group is also planning to cut about 15% of its senior management jobs as part of its efforts to reduce costs.
The company, which makes catalytic converters for vehicles and refines platinum group of metals (PGMs) used chiefly by carmakers, said earnings were also hurt by a lag in recovering higher costs in contracts with clients.
The British firm, which raised prices this year to counter rising costs, has also faced supply disruptions due to lockdowns in China and challenges in sourcing components from Ukraine.
Johnson Matthey forecast an improved performance in the second half on higher automotive production and easing supply chain pressures.
CEO Liam Condon said the company has given many employees additional one-off payments in the year to cope with inflation but said the company did want to give “massive” salary increases.
“What we didn’t want to do is give massive salary increases, and then when inflation goes back to normal, we’re stuck with an absurdly high kind of cost base,” Condon said.
Johnson Matthey, which is exiting its battery materials and health businesses to shift focus on hydrogen technologies and emission control catalysts, earlier this year started a programme to save £150m in annual costs by 2024-2025.
The group is also planning to cut about 15% of its senior management jobs as part of its efforts to reduce costs.
It projected underlying operating profit for the full year to be within the market’s range of expectations of £458m to £516m.
Shares of the London-listed group were down 2.2% having slid as much as 7% in morning trade.
JPMorgan analysts said investors may be disappointed that the company did not specifically anchor its expectations to the mean of the company-compiled consensus range.
The group’s underlying operating profit for the six months ended September 30 was £222m, down from £297m a year earlier.
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Johnson Matthey plans to cut 15% of managers as profit tumbles
Shares of London-listed maker of catalytic converters fall after it reported half-year profit dropped 30%
Johnson Matthey reported a 30% drop in half-year profit on Wednesday as supply chain disruption slowed production by carmakers and precious metals prices eased.
The group is also planning to cut about 15% of its senior management jobs as part of its efforts to reduce costs.
The company, which makes catalytic converters for vehicles and refines platinum group of metals (PGMs) used chiefly by carmakers, said earnings were also hurt by a lag in recovering higher costs in contracts with clients.
The British firm, which raised prices this year to counter rising costs, has also faced supply disruptions due to lockdowns in China and challenges in sourcing components from Ukraine.
Johnson Matthey forecast an improved performance in the second half on higher automotive production and easing supply chain pressures.
CEO Liam Condon said the company has given many employees additional one-off payments in the year to cope with inflation but said the company did want to give “massive” salary increases.
“What we didn’t want to do is give massive salary increases, and then when inflation goes back to normal, we’re stuck with an absurdly high kind of cost base,” Condon said.
Johnson Matthey, which is exiting its battery materials and health businesses to shift focus on hydrogen technologies and emission control catalysts, earlier this year started a programme to save £150m in annual costs by 2024-2025.
The group is also planning to cut about 15% of its senior management jobs as part of its efforts to reduce costs.
It projected underlying operating profit for the full year to be within the market’s range of expectations of £458m to £516m.
Shares of the London-listed group were down 2.2% having slid as much as 7% in morning trade.
JPMorgan analysts said investors may be disappointed that the company did not specifically anchor its expectations to the mean of the company-compiled consensus range.
The group’s underlying operating profit for the six months ended September 30 was £222m, down from £297m a year earlier.
Reuters
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