Philips records losses in the billions
Electronics group blames asset depreciation and weak dollar
Amsterdam (pte025/11.02.2003/11:42) Netherlands based electronics group Philips http://www.philips.com has closed its fiscal year 2002 with enormous losses.
After registering losses of over two million euros in the previous year, Philips today reported further losses of over three billion euros. Turnover decreased by two per cent to EUR 31.82 billion. Philips has attributed last year's poor results to the weak dollar and asset depreciation of up to EUR 3.26 billion.
Before amortisation, Europe's leader in entertainment electronics would have achieved profits of up to EUR 208m. Contributing most to the negative results were the group's stakes in Atos Origin, LG Philips Displays and Vivendi/Seagram, leading to a depreciation of EUR 1.34 billion in the fourth quarter. Had this not been the case, net profits in the fourth quarter would have totalled EUR 58m.
Philips expects more difficulties in the current year. Philips boss Gerard Kleisterlee said: "The economic outlook continues to be characterised by insecurities". To minimize the damage, Kleiterlee says the group plans to focus on cost and debt reduction. He did not comment on whether there would be another round of lay-offs this year.
Since his election to head of the company, Kleisterlee has reduced jobs by 15 per cent, sold several unprofitable subsidiaries and initiated a debt-control scheme. At the end of 2002, Philips employed 170,087 staff around the world.
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