THE HAGUE – Dutch firm Philips today said it anticipates a hit of up to €250 million (RM1.2 billion) from a possible safety risk in some sleep and respiratory care products, even as first-quarter profits edged higher.
The company, which has diversified into healthcare and last month sold off its domestic appliance business, said net profit was €40 million in the three months to March 31, a 2.6% rise on a year earlier.
Philips had sales of €3.8 billion in Q1, up 3.6% from the same period last year.
“Regretfully, we have identified a quality issue in a component that is used in certain sleep and respiratory care products, and are initiating all precautionary actions to address this issue, for which we have taken a €250 million provision,” said CEO Frans van Houten in a statement.
Philips said there are “possible risks to users” from sound-dampening foam in some sleep and respiratory care devices, which could degrade under conditions including unapproved cleaning methods, plus high humidity and temperature.
The firm said it is talking to regulators about the problem, which mainly affects first-generation DreamStation products, and “initiating appropriate actions to mitigate these possible risks”.
The Amsterdam-based company started off as a lighting firm more than 100 years ago, but has undergone major changes in recent years, focusing in particular on remote healthcare.
Philips announced last month that it is selling its home appliance business to Asian investment firm Hillhouse Capital for €3.7 billion, and sales from this are now listed under discontinued operations, according to today’s results statement.
The firm said despite continued “uncertainty” related to the Covid-19 pandemic, it has upgraded its sales forecast for 2021 on the back of increased demand for its healthcare products. – AFP, April 26, 2021
