Philips Electronics NV, Eindhoven, Netherlands, finds itself in favour with Standard & Poor’s Corp, which has raised its senior unsecured long-term debt rating to triple-B’-plus from triple B’. The rating outlook is stable, and the change reflects the clearly positive trend in Philip’s operating profitability and cash flow generation, and the fact that the group’s financial profile has improved considerably in the last two years, aided by an asset reduction programme and the sale of a minority interest in that Japanese chip-maker. The profitability improvement has become more consistent across the group’s main divisions than in the early stages of the recovery, but margins in the consumer electronics business, though improving, remain relatively weak, and losses at communication systems continue for the present, the ratings agency noted.
