Latest news with #NairobiProtocol
RTÉ News
06-05-2025
- Business
- RTÉ News
Philips cuts annual profit estimates as trade war clouds outlook
Dutch healthcare technology company Philips has today cut its profit margin forecast for 2025, citing a net impact from tariffs of between €250-300m despite "substantial tariff mitigations". The US is Philips' largest market, accounting for about 40% of its projected 2024 sales and one-third of its tax contributions. The company imports various products from China, including Respironics breathing masks, electrical shavers, toothbrushes, and other devices, while sourcing medical equipment from Europe. Philips plans to reduce the potential impact of trade tensions, mostly from US tariffs on Chinese imports and China's counter tariffs, with actions including pricing and supply chain adjustments, CEO Roy Jakobs said on a post-earnings call. He added that the company would accelerate production at some of its 46 US locations and further localise its Chinese operations, which supply 90% of its market in the country. While the rates and timing of US tariffs on the health sector remain unclear, analysts anticipate that companies will likely have to absorb any near-term costs if these tariffs are imposed. Washington has launched an investigation into the pharmaceutical industry, laying the groundwork for possible levies. "We are in contact with governments in China, in the EU, in the Netherlands, and also in the US", Jakobs said. "We also talk about indeed excluding medical technology from the current tariff regimes." Philips plans to leverage relief measures including the so-called Nairobi Protocol, which exempts from tariffs some devices used to treat chronic conditions. Other cost reduction measures do not exclude job cuts, "but it's far beyond people alone," Jakobs said. Philips, which makes consumer electronics, appliances and medical equipment, paid €38m in US customs duties last year, according to a February report. Including the impact of tariffs, Philips now expects its adjusted earnings before interest, tax and amortisation (EBITA) margin to come in a range between 10.8% and 11.3%, down from previous forecast of 11.8%-12.3%. "This appears to factor in a resumption of all tariffs at currently announced rates," JP Morgan said in a note. "There is scope for upside on any lowering of the rates." The Dutch company reaffirmed its forecast for comparable sales growth of between 1% and 3% this year, after reporting a smaller-than-expected sales decline in the quarter. A strong performance in North America helped offset a decline in China. Sales for the quarter ended March 31 were €4.10 billion euros, down 2% year-on-year in comparable terms, but exceeding analysts' average forecast of €4.02 billion, according to a company-provided consensus. The company is a main competitor of GE HealthCare and Siemens Healthineers. GE HealthCare also warned that tariffs could impact its full-year profits, expecting losses of around $500m. Siemens Healthineers reports its first-quarter results this week.
New Straits Times
06-05-2025
- Business
- New Straits Times
Philips cuts annual profit outlook on potential impact from US tariffs
KUALA LUMPUR: Dutch healthcare technology company Philips on Tuesday cut its profit margin forecast for 2025, citing a net impact from US tariffs of between 250 and 300 million euros (US$283 million-US$340 million) despite "substantial tariff mitigations." The United States is Philips' largest market, accounting for about 40 per cent of its projected 2024 sales and one-third of its tax contributions. The company imports various products from China, including Respironics breathing masks, electrical shavers, toothbrushes, and other devices, while sourcing medical equipment from Europe. "In an uncertain macro environment that has intensified due to the potential impact of tariffs, we are focused on what we can control," CEO Roy Jakobs said in a statement. The company cut its full-year core profit outlook, despite posting first-quarter sales slightly above expectations. Philips now expects its adjusted earnings before interest, tax and amortisation (EBITA) margin to come in a range between 10.8 per cent and 11.3 per cent, down from previous forecast of 11.8 per cent-12.3 per cent. While the rates and timing of tariffs on the health sector remain unclear, analysts anticipate that companies will likely have to absorb any near-term costs if these tariffs are imposed. Washington has launched an investigation into the pharma industry, laying the groundwork for possible levies. Philips, which makes consumer electronics, appliances and medical equipment, paid 38 million euros in U.S. custom duties last year, according to a February report. The report said the group would mitigate the impact of tariffs including through relief measures and the so-called Nairobi Protocol, which exempts from tariffs some devices used to treat chronic conditions. The Dutch company reaffirmed its forecast for comparable sales growth of between 1 per cent and 3 per cent this year, after reporting a smaller-than-expected sales decline in the quarter. A strong performance in North America helped offset a decline in China. Sales for the quarter ended March 31 were 4.10 billion euros, down 2 per cent year-on-year in comparable terms, but exceeding analysts' average forecast of 4.02 billion euros, according to a company-provided consensus.
Sky News AU
24-04-2025
- Business
- Sky News AU
Major Australian medical technology manufacturer ResMed secures tariff exemption from Trump Administration
A major Australian company has managed to secure a tariff exemption from the Trump Administration as the world waits to see how the United States President will proceed with the market rocking trade policies. The CEO of ResMed, a $49b company which manufactures sleep devices to treat sleep apnea and other chronic respiratory conditions, on Thursday revealed the Trump Administration will not apply tariffs to goods it makes in Australia or Singapore. ResMed's goods have been exempt from trade levies as they are protected under the Nairobi Protocol – an international agreement that guarantees products which help people with disabilities are duty-free. 'Our products are used to treat patients with chronic respiratory conditions that have been subject to global tariff relief for decades,' ResMed chief executive Mick Farrell told investors. 'We have reaffirmed that. That is the case with federal authorities just this month in the current setting.' ResMed's chief financial officer Brett Sandercock said the company was informed several days after President Trump made his 'Liberation Day' announcements that it would maintain its tariff exempt status, despite the US President hitting most countries around the globe with the levies. 'On April 5, US Customs and Border Protection issued a notice of implementation confirming that current tariff treatment of our products like ours continues,' Mr Sandercock said. 'Accordingly, we do not expect the introduction of US tariffs to have a material impact on our financial results.' ResMed also revealed plans to double its manufacturing footprint in the US by opening a new facility in California, as growing demand for the medical company's goods continues. While the company was given a tariff exemption, Mr Farrell said ResMed will continue to monitor the global trade environment as President Trump's trade announcements have rattled markets over the past month. 'As the global leader in helping patients with chronic respiratory conditions, we are closely monitoring the evolving global trade environment, particularly in area of tariffs,' he said. President Trump initially slapped a 10 per cent tariff on Australia - the baseline levy implemented globally - before temporarily pausing this, alongside most other tariffs he announced on "Liberation Day". The US still has a 145 per cent tariff on Chinese goods, while China has implemented a 125 per cent reciprocal tariff. President Trump, however, is expected to lower the tariff on the US, telling reporters earlier this week the levy is not sustainable.
West Australian
24-04-2025
- Business
- West Australian
Solid earnings and tariff break awaken ResMed price
Sleep device manufacturer ResMed has confirmed an exemption to US tariffs, surging quarterly earnings and an enviable balance sheet, but the company's boss is not napping on the result. The ASX-listed company lifted its third-quarter revenue eight per cent to $1.3 billion, boosted its earnings per share by more than a fifth and reported operating cash flow of $579 million. "It's a great performance by the team - 10,000 'ResMedians' selling in 140 countries in this crazy environment that's going on right now," CEO Mick Farrell told AAP. "But they just focus - laser focus." The group makes devices and other products for people with sleep apnoea, insomnia and obstructive pulmonary disease - a potential target market of 2.3 billion people worldwide. In markets where the $1300 starting price for a continuous positive airway pressure (CPAP) machine and a $200 mask are out of reach, ResMed offers a subscription service. Shares in the company soared more than seven per cent after the earnings call, helped by an exemption to US tariffs, which could have impacted its manufacturing plants in Singapore and Australia. ResMed's products are exempted by the Nairobi Protocol, launched in 1982 under then US president Ronald Reagan to protect products made for people with a disability. US Customs and Border Protection reaffirmed ResMed's devices were tariff-free on April 5, two days after President Trump's "Liberation Day" tariffs sent markets into a tailspin, wiping trillions of dollars from global markets. "We are now bringing products over tariff-exempt and we'll continue to do so," Mr Farrell said. Tariffs aside, global uncertainty and lumbering growth could affect consumer behaviour, but Mr Farrell was optimistic about maintaining momentum. "We're not selling iPhones or Teslas or disposable electronic goods," he said. "We're selling medical products that save your life." Patients using ResMed's pressure machine therapy have a 37 per cent lower risk of death, according to meta-analysis in medical journal The Lancet. The risk of death by heart attack for pressure machine patients fell by 55 per cent. Mr Farrell had faith in global growth returning despite the US tariff turbulence, but in the meantime he was grateful for medical tech's position to weather the storm. "Challenges breed opportunities, and people talk about luck, but ... luck is an overlap of preparation and opportunity," he said. "And in that little Venn diagram I'm seeing a lot of luck could come our way."
