The company Philips has recovered most of the funds paid in the US for import duties imposed by the Donald Trump administration, following a court ruling that deemed a significant portion of these tariffs illegal. Estimates indicate that over 175 billion dollars (153 billion euros) in import duties were improperly collected.
In the wake of the court ruling, companies began to apply en masse for refunds. Philips also submitted a request and has already reclaimed most of the funds. The company anticipates receiving the remaining amount next quarter, CEO Roy Jakobs reported during the presentation of quarterly results.
At the same time, Jakobs emphasized that the tariff issue is not resolved for the company, as Donald Trump has reintroduced import tariffs on other legal grounds. “Unfortunately, tariffs are something we will have to deal with in the near future,” he said. Since Philips is actively engaged in the American market, it continues to pay duties when importing certain components.
Financial results and investments
Philips manufactures medical equipment, including MRI scanners and X-ray systems, as well as personal hygiene products like electric toothbrushes and razors. The company is also facing rising costs due to increased prices for energy, transportation, and microchips.
Despite these challenges, the year is progressing well for the company, noted Jakobs. Last quarter, Philips generated 4.4 billion euros in revenue, a 4% increase compared to the previous year. The company is seeing particularly positive trends in Europe, thanks to large contracts with hospitals in Sweden, Poland, and Great Britain. Earlier this month, Philips also announced a 50 million euro investment in the development of medical technologies in the Netherlands, in partnership with the Dutch government, which will contribute over 100 million euros. “European investments in medical technologies are becoming increasingly active,” Jakobs noted.
Consequences of the sleep apnea scandal
Philips aims to finally overcome the fallout from the scandal involving sleep apnea treatment devices. It was discovered that some devices could emit particles of potentially hazardous polyurethane foam, resulting in multi-billion losses and significant reputational damage. The company still lacks permission to sell these devices in the US.
Currently, a legal process is underway between Philips and Dutch shareholders. Investors are demanding an independent investigation to determine whether the company acted appropriately in its internal decision-making. If violations are found, they may seek compensation. Following the scandal, the value of Philips shares has yet to return to the peak levels of 2021.
Philips also inadvertently published its quarterly results on Monday evening — a day earlier than scheduled. According to Roy Jakobs, the reason was an “administrative error.”
Source: de Volkskrant
