Philips turns corner

MUMBAI, FEB 26: Electronics good major Philips India has climbed back into the black in the 1998 fiscal with a net profit of Rs 11.98 cro...

MUMBAI, FEB 26: Electronics good major Philips India has climbed back into the black in the 1998 fiscal with a net profit of Rs 11.98 crore after it had slipped into the red in the previous fiscal. It had posted a net loss of Rs 14.14 crore in 1997.

Piggybacking on the performance of the lighting division, the company8217;s sales were up 7 per cent at Rs 1,674.34 crore during the fiscal against Rs 1,572.79 crore in the previous year. Operating profit, at Rs 50.73 crore, was up 13 per cent.

The subsidiary of the Dutch electronics major, which is now almost through with its ongoing restructuring, has provided for a restructuring charge of Rs 34.3 crore, down by 47 per cent from Rs 64.3 crore in 1997.

The company managed to bring its interest cost down to Rs 34.96 crore from Rs 35.58 crore. The board of directors has recommended a dividend of Rs 1.50 a share as compared with Re 1 per share in 1997.

For the last quarter, however, Philips8217; net profit has dipped to Rs 2.88 crore from Rs 4.72 crore in the corresponding period of the previous fiscal.

Managing Director K Ramachandran said: quot;The hiccups are over now and the better results, though modest, has been possible because of tighter controls and better processes. The product portfolio of most of our businesses is in place. We are definitely looking forward to a better 1999.quot;

On the company8217;s future, Ramachandran said: quot;We will be unhappy if we cannot record double digit growth for the next three years. We expect to grow by at least 12-15 per cent every year.quot;

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Commenting on the various business divisions, he said: quot;The lighting division has performed exceptionally well and will continue to grow at similar rates. The audio business has held its line in a very difficult year, while in colour televisions Philips could have done better.quot;

He added that the consumer electronics division, which contributed around 45 per cent to the turnover in 1998, will grow at around the 20 per cent over the next few years. quot;But there could be some bad years in between and some with phenomenal growth rates,quot; Ramachandran cautioned.

Philips, in the current fiscal, will continue with its strategy of continuous product launches and investment in brand-building. As part of the plan, three new models of colour televisions are slated to be launched over the next couple of months while some others will be upgraded. The company also sees immense future for digital products in India.