Royal Philips NV reported a profit of €769 million (RM3.755 billion) during the third quarter of 2020. By doing so, the company exceeded estimates projected by various experts and analysts.
Philips’ Financial Success
Philips stated that its profits before interest, taxes, and amortization were 32% higher in the third quarter when compared to its second-quarter figures. During the quarter, Philips saw its greatest levels of growth in connected care and personal health.
Unlike most other companies, the effects of the ongoing Covid-19 pandemic have been very beneficial for Philips’ profit levels. This is because demand for many of its medical supplies has soared ever since the beginning of the pandemic. Philips thus expects its level of annual sales growth to increase every year until 2025 at the earliest. It also believes that even after the pandemic ends, the effects left behind and the changes which have already taken place within the healthcare industry will continue to drive demand, sales, and profit.
Other Philips medical products which have been in high demand include monitors used for medical purposes. Equipment which allows medical staff to attend to patients’ needs has also been in much demand.
Philips’ Future Prospects
In an interview with Bloomberg, Philips chief executive officer Frans van Houten said that he expects Philips’ sales to continue increasing throughout the rest of the year. This is because as Covid-19 begins to subside in some countries, demand for surgical and other medical supplies unrelated to the virus will increase. Nevertheless, van Houten stressed that the company would not stop devoting resources towards battling the pandemic.
Van Houten also noted that Philips’ strategy which prioritized healthcare informatics was beginning to pay off. “There is a structural higher demand for the healthcare informatics that Philips has already invested in for several years, and now we see the validation of that strategy,” he said.
Philips expects the bulk of its profits in 2021 to be received through sales of equipment for diagnosis, treatment, and personal health. Increases in such sales are expected to overcome a likely loss in sales of connected health products.
Philips played a key role in the fight against Covid-19 by investing over €100 million (RM490 million) in ventilators. These ventilators saved many Covid-19 sufferers in hospitals. The company also signed 11 new long-term strategic partnerships with hospitals in various parts of the world. One of these was a multi-year partnership with Tampa General Hospital in Florida. Philips intends to upgrade imaging technologies and patient monitors in that hospital.
20th October 2020 15:34
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