Philips faces parts shortages and projects growth for the second half of 2022

The shortage of parts that affects most companies in the world reached Philips, a Dutch health technology company. Due to the problem in the supply chain, it is possible that the desired profit will not be reached and even a fan recall will have to be expanded. The consequences are already starting to hit the company's finances squarely: the shares fell by more than 15%. The company expects the recovery to take place in the second half of the year.

Optimistic scenario for 2022

Although the beginning of the year was not favorable for Philips, CEO Frans van Houten said in a statement that sales are expected to grow between 3% and 5% compared to 2021, with an improvement of 40 to 90 points.

Even so, there are still sectors that need considerable improvement, such as the sleep and respiratory care unit, which still suffers from the recall of devices.

Philips respirator
Philips' healthcare technology sector is facing a crisis due to a shortage of parts, such as respiratory care devices. Image: Shutterstock

In addition, there are concerns that a type of foam used in devices could degrade, becoming toxic, which could harm the environment.

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Stock spending could hurt the company

The upbeat growth forecast for 2022 may face an additional challenge: litigation costs from hundreds of class actions.

To repair and replace around 5 million devices worldwide, the company has set aside €725 million, equivalent to US$820.41 million, but this amount will not be used in court.

As a result, fears over claims accounts have already reduced Philips' market value by around 15 billion euros in the last nine months.

Based in Amsterdam, the company released a balance sheet stating that sales in the fourth quarter of 2021 were down 10% compared to the same period in 2020.

Via: Reuters

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The post Philips faces parts shortage and forecasts growth for the second half of 2022 appeared first on Olhar Digital.

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