Philips disappointed about US decision to ditch the major part of ventilator deal
The United States is cancelling a large part of an earlier order for 43,000 lung ventilators from Philips by the US Department of Health. Philips now supplies a total of 12,300 of these devices. The rest of the contract expires.
The original deal involved a total of nearly USD 647 million, or almost EUR 544 million.
“The reduction in the supply of ventilators will of course affect Philips’ financial performance, ” writes CEO Frans van Houten in an explanatory statement. He is disappointed at what he calls an” unusual ” decision by the American government.
Philips had just greatly increased production.
“We have achieved a quadrupling of the production of ventilators with substantial investments,” said Van Houten.
Hundreds of extra people had been hired, who according to Philips have been working around the clock. The order was announced in april.
The company is now counting on a modest, comparable turnover growth, with an operating profit margin that will be approximately the same as last year. Earlier a higher margin was expected. Van Houten says that despite the cancellation, Philips ‘ order book is still at record height.
Philips dropped more than 2% of the Amsterdam main stock exchange.