Neo Performance Materials, considered a bellwether for the health of the magnetics industry and market, rebounded strongly from the Covid-19 slump in the most recent quarter with a gain of 44% in revenue over the same period a year ago. Revenues and tonnage were both up significantly leading to big gains in operating income and profitability.
The strong results were driven largely by the economic recovery from the impact of COVID-19 and supply chains being refilled. Selling prices also strengthened as rare earth prices continued to rise through most of the first quarter of 2021. Compression magnets and electric-vehicle applications were particularly strong sectors for its magnetics business.
Revenues of $130.9 million for the period ended March 31 brought the second consecutive quarter of resurgence company-wide, following an 18.4% gain in revenue in the previous quarter. Volume improved 27% to 4,206 tons while operating income jumped 227% to $16.4 million compared to the same period a year ago. Compared to the previous quarter, operating income shot up 414% while earnings climbed significantly also.
“I am pleased to see demand, volumes, and margins return to robust, pre-COVID levels across most of our businesses, resulting in strong operating results in the first quarter,” said Constantine Karayannopoulos, CEO. “The positive trend and momentum driven by strong demand for our current product portfolio, particularly those in the automotive electrification applications supply chain, continue to show promise in the second quarter.”
“I am also increasingly optimistic that several new product development efforts are likely to achieve commercial viability over the next several quarters,” he added. “These advanced materials are targeted to new industries and end-markets for Neo, and I look forward to being able to discuss them in more detail as our development efforts advance.”
Business in Its Magnequench segment for rare earth magnetic materials was particularly robust. Revenues increased 68.5% to $64.9 million compared to $38.5 million in the same period for 2020. Volume increased from 1,271 tons to 1,725 tons.
For the three months, volumes in the Magnequench segment saw a continued rebound and strong growth compared to prior periods. The volume growth came across almost all key applications but particularly in the automotive segment, the company reported. A portion of the volume growth can be attributed to customers rebuilding inventory levels and a portion is attributed to new growth in new platforms. For example, the compression magnet production volumes doubled compared to historical levels as Magnequench continues to make progress in this strategic initiative. Volumes for key electrified-automotive applications, such as traction motors and pumps, also saw very strong growth. For more info, see www.neomaterials.com.