Johnson Matthey sees hit to short-term cash flow on higher metal prices By Reuters

(Reuters) – Johnson Matthey (LON:JMAT) on Thursday forecast low-to-mid teens percentage growth this year, as automakers demand more car pollution filters and Asia faces tighter regulations, but the company warned that rising metal prices could hit its cash flow.

One of Europe’s leading producers of autocatalysts, Johnson Matthey saw a strong recovery in demand for its car pollution filters in the second half of 2020 after witnessing a slump from the auto sector during the initial lockdowns.

The company’s underlying operating profit fell 6% to 504 million pounds ($711.45 million) for the year ended March 31, beating analysts’ average expectations.

Johnson Matthey, which also engages in refining and marketing platinum group metals (PGM) used chiefly by automakers, said the automotive end-market remained uncertain due to potential disruption from chip shortages.

The British firm, which is trying to pivot to battery materials and hydrogen technologies, also said capital expenditure is expected to be 600 million pounds for the year.

As part of its strategy to invest more in sustainable technologies, Johnson Matthey had agreed last month with state investor Finnish Minerals Group to build a plant to produce cathode materials used in electric vehicle batteries.

($1 = 0.7084 pounds)