Led by a decline in volume and revenues from its Magnequench magnetic materials segment, Neo Performance Materials saw revenues fall 10.3% in 2019, as the company reported in its year-end financials in March. Yet the company posted significant gains in advanced magnetic materials used in electric and hybrid vehicles. With its strong portfolio of neodymium rare earth magnetic materials and compounds, Magnequench is considered a bellwether for the advanced magnetic materials industry.
Revenue in the Magnequench segment was $173.8 million, compared to $213.7 million 2018, a decrease of $39.9 million or 18.7%. Volume decreased to 5,584 tons compared to 6,128 tons in 2018, a decline of 8.9%.
In general, Magnequench volume declines occurred mostly in its legacy and longer running programs due to the slowdown in auto sales and slower economic performance in certain sectors, said the company. However, it continues to see growth related to newer products including traction motors for hybrid and electric vehicles as well as programs that are still ramping up volumes to full production levels.
Exclusive of its legacy EPS program, its volume in automotive applications grew by approximately 9% year-over-year, despite the slowdown of the automotive industry generally. This growth includes the traction motor application, used in hybrid and electric vehicle drivetrains, where volumes grew by approximately 45% year-over-year.
Accounting for about 42% of revenues, Magnequench is the largest of three primary business segments for Neo. The others are Chemicals & Oxides and Rare Metals. Overall, the company posted total revenues of $407.5 million compared to $454.2 million in 2018, with net income of $23.1 million.
Despite completing a $9.5 million acquisition of Anhui Asia Magnets Co., Ltd. (SAMAG) in August (see www.MagneticsMag.com and query for “SAMAG”), along with other cash outlays, Neo further strengthened its financial position, beginning with $71 million in cash and cash equivalents while ending the year with $84.7 million for the year.