FX.co ★ Philips’ profits increase sevenfold in Q1

Dutch-based Royal Philips NV reported a sevenfold increase in its net profits to 259 million euros in January-March from 37 million euros in the first quarter a year earlier.

The company said that profits rose mostly due to the better operational performance and lower financial costs.

The improvement was driven by an 18% increase in Adjusted EBITA to 442 million euros in the first quarter compared to 374 million a year before. Dutch electronics giant’s sales rose to 5.7 billion euros, up 3.6% from January to March when sales totaled 5.52 million euros.

The company expects sales growth on a like-for-like basis at 4-6% in 2017 and a 100-basis-point improvement in Adjusted EBITA.

The company saw its like-for-like sales rise by 2% in January-March and EBITA adjusted profitability increase by 90 basis points on a sequential basis and by 230 basis points on a yearly basis to 7.6%.

Revenues increased by 2% in developed countries and rose by 7% in developing economies. This was mainly due to the growth recovery in China, Latin America and India.

At Philips' healthcare-linked businesses, sale rose by 3%.

Moreover, the company is spinning off Philips Lighting through an initial public offering last year and cutting its stake in the lightning arm to 55.18% from 71.225% in February.

In the reporting period, Philips Lighting’s like-for-like sales were unchanged. Phillips is continuing to add Philips Lighting’s figures to consolidated statements, although it plans to sell its remaining stake in the firm.

So far this year, the Philips group’s market capitalization has grown by 5.2% to 28.4 billion euros, and the value of Philips Lighting has risen by 20.9% to 4.2 billion euros.