MUMBAI: Royal Philips Electronics has reported that sales in the second quarter were up 10 per cent year-on-year. Its net income was 301 million euros.

Sales increased strongly in the second quarter to 7,601 million euros. This represents a 10 per cent rise from the same quarter last eyar.

Adjusted for the effects of currency movements and consolidation changes, comparable sales increased by 11 per cent driven by strong growth in all operating divisions.

EBIT amounted to 367 million euros compared to 158 million euros in the same period of last year. In difficult market conditions, the EBIT of the consumer electronics division held up. Brand campaign costs were 47 million euros lower than in the same quarter for last year due to an amended seasonal spend pattern.

Financial income and expenses resulted in income of 127 million euros compared to an expense of 57 million euros in thew same quarter last year. The improvement is due to the recognition of a TSMC cash dividend of EUR 223 million, net of tax.

Cash inflow from operating activities increased to 300 million euros, compared to 52 million euros in the same quarter last year due to lower additional working capital requirements. Inventories as a percentage of sales amounted to 12.2 per cent, a decrease of 1.2 percentage points compared to Q2 2005.

Philips’ president and CEO Gerard Kleisterlee says, “We had an excellent second quarter to round off a good first half year. Our transformation into a market-driven healthcare, lifestyle and technology company starts to show its merits, with strong profit contributions from Medical Systems, Lighting and DAP. Our consumer electronics business model is showing its robustness in difficult conditions for the industry and Semiconductors is delivering the expected benefits of its business renewal programme.

"Continuing our consistent focus on shareholder value, we are pleased to announce the launch of a further 1.5 billion euros share repurchase programme, to start in the third quarter.”