Philips hit by surprise £1.1bn loss

The world’s biggest lighting firm has been hit by rising raw material costs, sagging consumer confidence, sluggish construction markets and government budget cuts in the healthcare sector.

The Dutch group announced an unexpected 1.4bn euro writedown on healthcare and lighting acquisitions, just weeks after profit warnings at two key divisions.

Philips, heavily exposed to the mature European and US markets, has highlighted the need to expand in the fast-growing Asian and emerging economies.

It gave a bleak outlook for the next two quarters, lowered profit margin targets for its three core businesses for 2013, and said it would cut costs by 500m euros.

German engineering conglomerate Siemens, which competes with Philips, last month warned of slower growth.

Philips also warned in June of sharply lower second-quarter profits and slowing sales growth.