Difficult trading conditions in key markets dampen Johnson Matthey's sales in Q3

Johnson Matthey reported a slight drop in sales in the third quarter, down 1% from £745m to £736m, and said 'challenging business conditions' would have an impact on its business going forward.

The firm reported difficult trading environments in several of its key markets which had an impact on its performance.

Sales in Fine Chemicals were down 23% at £57m due to the absence of income from Research Chemicals which was sold to Alfa Aesar in September 2015.

The firm said this, together with a less favourable product mix, also had an impact on operating profit, which was lower in the quarter.

Sales in the Active Pharmaceutical Ingredient Manufacturing business increased slightly as good demand for speciality opiates was partly offset by lower sales of bulk opiates. Catalysis and Chiral Technologies' sales grew strongly in the period, supported by good demand for catalysts.

The firm said it expects to deliver a strong final quarter, but challenging macroeconomic conditions (oil, precious metal prices, China), which have worsened slightly since the firm's half-year results in November, are expected to limit the group's short-term growth opportunities.

The Group's £30m restructuring programme remains on track and some benefit of this is expected to be seen in the fourth quarter.