Amsterdam: PhillipsA Dutch health technology company said Monday it had set aside 575 million euros ($631 million) for potential litigation costs related to the global recall of breathing machines.
Based in Amsterdam Phillips is dealing with the fallout from a global recall of millions of respirators used to treat sleep apnea, announced in June 2021 over concerns that the foam used in the machines could become toxic. The recall wiped out about 70 percent of Philips’ market value in the past two years as investors fear the costs of a series of lawsuits launched by concerned patients.
CEO roy jacobs said the provision taken in the first quarter was “in anticipation of a settlement of the economic loss class action lawsuit in the US.” and marked an “important step in addressing the litigation.”
Philips is still working on an agreement with the US Food and Drug Administration (FDA) and is the subject of an investigation by the United States Department of Justice.
He said the outcomes of these events were still too uncertain to make a provision.
Philips also reported much better-than-expected first-quarter results, as core earnings rose nearly 50 percent to €359 million and comparable sales were 6 percent higher than a year earlier.
On average, analysts in a survey compiled by the company forecast adjusted earnings before interest, taxes and amortization (EBITDA) would fall 15 percent, with sales growth of less than 2 percent. ($1 = 0.9108 euros)
