Johnson Matthey Drops as Chemical Plant Investments Put on HoldAndrew Noel
Johnson Matthey Plc fell the most in more than two years after the British supplier of catalysts used in chemical manufacturing said declining oil prices are affecting investments in chemical plants.
The impact is being felt across the industry, with delays in decisions on expansion projects and new factories, Finance Director Den Jones said in an interview today. The shares fell as much as 5.8 percent, the steepest intraday drop since November 2012.
Johnson Matthey is monitoring developments at oil and petrochemical producers and taking no internal action yet to counter the slowdown, Jones said. Fiscal third-quarter sales were little changed at the Process Technologies catalyst-making division, with operating profit dropping “significantly,” as China’s market growth slowed, the London-based manufacturer said today in a statement.
Johnson Matthey reiterated a forecast for a slight increase in underlying pretax profit in the year through March.
The stock was trading down 5.6 percent at 3,303 pence as of 9:06 a.m. in London, leading to a 0.9 percent decline for the past 12 months.
“We’re not freezing anyone’s wages like BP at the moment,” Jones said. Even so, “Process Technologies will find growth this year quite difficult,” and the unit may be hurt if crude prices stay at current levels. The company would “like it” if oil prices were at $70 a barrel or more, he said.