Johnson Electric Holdings Limited, Hong Kong, has announced its results for the six months ended September 30th 2018. Following a record net income in the previous full year results, the company reported further growth in the first half of the 2018/19 financial year, posting total group sales of $1,678 million for the period, up 9% compared to first half of the prior financial year.
Excluding the impact of acquisitions and foreign exchange rate changes, underlying sales increased 7%. Net profit attributable to shareholders was essentially unchanged year on year at $140 million. “Johnson Electric continues to deliver healthy top line growth from both of its Automotive Products and Industry Products divisions. The long term shifts towards more electrified, more controllable and more connected end-products underpin demand for our motion technologies and solutions,” the report stated.
The Automotive Products Group (APG), excluding acquisitions, increased sales by 8% on a constant currency basis compared to the first half of the prior year. The strongest business unit performances came from automotive PM parts maker Stackpole International, Powertrain Cooling and Engine & Transmission Management which are benefiting from the ramp-up of major customer programmes for a new generation of products.
APG’s strong overall sales performance was reported to come against a subdued picture in terms of global automotive industry volume growth. North American light vehicle production grew by less than 1% during the period under review as rising interest rates and higher vehicle prices have begun to impact demand. In Europe, production volumes rose by just over 1% and there has recently been a reduction in output following the introduction of new emissions tests that has caused significant delays to the launch of new vehicle models. It was also stated that in China, which has been the world’s largest and standout growth market for automobiles for the past decade, production growth slowed in the first half to below 3%.
Commenting on the results, Dr Patrick Wang, Johnson Electric’s Chairman and Chief Executive, stated, “Johnson Electric achieved satisfactory financial results for the six month period ended 30 September 2018 in the context of an increasingly challenging global operating environment. In the near term, the indications are that many of the factors that shaped the performance of the business in the first half of the financial year are set to continue in the second half – but with an increasing downside risk with respect to the global economy. Order volumes in China and Europe remain somewhat below anticipated levels, though the outlook for second half sales for the Group as a whole currently looks broadly similar to the first half.”