Johnson Matthey PLC trims interim dividend as profits hit by lower demand during

() has declared a slightly smaller dividend for the first half after its profits shrank 88% despite a 2% rise in sales.

Revenues from the chemicals group came in at £6.98bn for the six months to September 30, 2020, which was boosted by higher average precious metal prices, as the FTSE 100 company is a major refiner, recycler and trader of platinum, which is also used in its catalytic converter business.

But the catalyst business, called Clean Air, saw lower demand this year amid a worldwide hiatus on driving and car purchases during the pandemic lockdowns, leading the company to take an impairment and restructuring charges of £78mln.

Mainly as a result of a 57% decline in Clean Air operating profits, 14% at its Efficient Natural Resources arm and 21% at its Health unit, group profit before tax plunged to £26mln from £225mln a year ago.

But chief executive Robert MacLeod said Clear Air is “currently seeing a strong recovery in demand across all regions”, especially in China, while Efficient Natural Resources is seeing “positive momentum in licensing”.

He said “good progress” was being made with the commercialisation of its new battery material, eLNO, and as a result of increasing confidence from customer testing, the design of a second commercial plant is now underway.

Given more confidence from this recent activity and its restructuring plans that will entail the loss of 2,500 jobs over three years, but tempered by a still-uncertain market backdrop, the board has approved an interim dividend of 20p per share, compared to 24.5p this time last year.