Philips struggles to turn round results

By Matt Whipp

Posted on 11 Feb 2003 at 12:53

Record loss follows record loss as Dutch technology giant fails to live up to promises.

Hopes of returning to profit in 2002 were dashed as Royal Philips Electronics posted a full year loss of £2.1bn, out-lossing the previous year's record of £1.72bn, despite the company repeatedly claiming that 2002 would see a return to the black.

The firm's investments in other companies, such as Vivendi Universal and LG Philips Displays, cost it nearly £2bn over the year. Philips said that it was not expecting 'any short term improvement in conditions', particularly given the weakening US dollar.

Sales for Q4, while up 12 per cent sequentially, were down 4 per cent on Q4 2001. However, the company announced that cost-cutting schemes were paying dividends, putting operational income into the black, from a loss of £302m in 2001 to a profit of £31m in 2002: inventory was at an all time low, at 11.1 per cent, while margins increased and costs grew lower.

The company's net debt decreased by £1.12bn to £3.47bn.