Neo Performance Materials Inc. reported a strong first quarter of 2018 with a 12.7% increase in revenues and projects continued growth in its Magnequench business unit. The Toronto-based manufacturer of rare earth and rare metal-based functional materials had revenues of $434 million in 2017, climbing 13.6% over 2016.
We had a very good first quarter, supported by many of the global macro growth trends such as electrification of vehicles and more stringent air emission standards that we expect will continue to drive demand for our products, said Geoff Bedford, Neos president and CEO. In December, the company raised about $200 million in an initial public offering.
Magnequench, its magnetic powders unit, continued to see growth in many of its end market applications including micro-motors for vehicles and traction motors. Revenues were up by 17% in the quarter from the prior year largely due to the increased prices even though volume declined 8%, said Bedford. Sales into the automotive sector continued to be strong, driven by the increased use by manufacturers of permanent magnet motors across most vehicle lines to reduce vehicle weight and, increase fuel economy. Sales of the companys zero-heavy-rare earth magnetic powders for use in vehicle drive train motors is expected to see robust growth, he said.
The companys chemicals and oxides segment reported a 5% increase in revenue in the quarter over the prior year, primarily driven by higher rare earth pricing, amidst a volume decline of 12%. Its rare metals segment booked a particularly strong quarter versus the prior year, with volume expanding 45%, revenue higher by 24% and operating income up 106%.
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