Philips made a loss of EUR 152 million in the first quarter of 2022. A year earlier, the loss was 34 million euros. The turnover of the health technology company has declined by 4 per cent compared to the first quarter of 2021 .
CEO Frans van Houten says the results are satisfactory, given the difficulties the firm is experiencing. The recall operation of sleep apnea machines is an ongoing concern. The (expected) costs of the recall increased by 165 million euros. The company also expects the number of repairs to increase by 300,000. Philips expects to complete the recall by 90 percent by the second quarter of 2022.
The company also faces challenges in the supply chain, including the corona situation in China and the war in Ukraine. In addition, the company was subpoenaed by the US Department of Justice. This was concerning the problems surrounding the sleep apnea machines.
Despite the problems, the company says it is positive about the future. For example, several long-term agreements have been signed with hospitals in EU, United Kingdom and China. CEO Frans van Houten also expresses satisfaction over the business results.
Lower costs, higher prices
Philips also reports that is going to cut costs by up to 200 million euros in 2022 and to raise prices in an effort to address inflation.