Neo Performance Materials Rebounds from Covid-19 Slump

Neo Performance Materials reports a sharp rebound in business as automotive and industrial markets that it serves bounce back from the Covid-19 slump. Considered a bellwether of the magnetics industry, the company released on March 22 its financial performance data for the past 12 months. 

Highlights include revenue of $110.4 million for its fourth quarter, rising 16.8% over the same period a year ago and 41.8% higher than the preceding quarter. Volumes also jumped in the final quarter of the year to 21.4% over the third quarter, with a 9.3% gain over the same period a year ago. While its operating income in the fourth quarter of $3.2 million was lower than the same period a year ago, it rose sharply by 180.6% from the preceding quarter.   

Constantine Karayannopoulos, CEO 

“Automotive and industrial markets saw a strong resurgence in the fourth quarter, driving growth across many of Neo’s business lines, increasing volumes to more normalized levels, and helping Neo finish out 2020 on a very solid footing,” said Constantine Karayannopoulos, CEO.   

“Moreover, we are seeing these trends continue to strengthen into 2021, especially as automotive and industrial end markets accelerate toward increasing electrification of vehicles, reduced energy intensity in factories and homes, and meaningful reductions of greenhouse gas emissions, all of which will require greater supplies of rare earth materials.  Neo is very well positioned to benefit both from organic growth as the global economy continues to rebound and from additional strategic alliances and opportunistic investments that we are examining in the near- and mid-term horizons.” 

The business of Neo is organized along three segments — Magnequench, Chemicals & Oxides and Rare Metals. The Magnequench sector, largest of the three, includes its rare earth magnets and magnetic materials business which in 2020 accounted for about 44% of company revenues. For the year ending December 31, 2020, Magnequench had sales of 5,016 tons, a drop of 11% from 5,584 tons in 2019. The fourth quarter displayed the rebound, however, as tonnage increased by 17% over the same period in 2019, rising to a level of 1,626 tons. Revenue-wise, the picture was even better, as sales jumped 22% to $52.5 million from $42.7 million in the fourth quarter of 2019. As with tonnage, however, revenues posted a reduction for the full year, dropping 13% from $173.8 million in 2019 to $152,966 in 2020.