Philips pays dividend after return to black

PHILIPS, the Dutch electronics group, returned to the black in 1993 after three years of restructuring and paid its first dividend for five years, writes Mary Fagan.

The company made a net profit of 1.965bn guilders ( pounds 688m), compared with a loss of 900m guilders. A dividend of 0.50 guilders is proposed, the first since a 2-guilder payment in 1989.

Philips' results were boosted by an extraordinary profit of 1.109bn guilders from the sale of its 35 per cent stake in Matsushita Electronics and from the issue of shares by PolyGram, the music company in which Philips has a 75 per cent stake. Net profit before extraordinary items was 856m guilders.

Sales in 1993 rose to 58.82bn guilders from 58.52bn. Philips was cautious about any underlying improvement in net profit in 1994. Despite continued improvements in the US economy, growth in Asia would be flat and improvements in Europe were some way away.

Philips, which plunged into crisis in 1990 with a loss of 4.2bn guilders, said that substantial improvements in costs had been achieved through restructuring.

But the gains had been partly offset by downward pressure on prices. Last year Philips shed 13,700 jobs and the company said more would go in 1994 as the reorganisation of the group continued.

Jan Timmer, president, said the main problem areas to be addressed were the communications division and Grundig, its German consumer electronics subsidiary, which made a loss of almost DM300m ( pounds 118m) in 1993.