Philips, Al Faisaliah in 50-50 JV

Updated 01 October 2012
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Philips, Al Faisaliah in 50-50 JV

RIYADH: Royal Philips Electronics and Al Faisaliah Medical Systems (FMS), a subsidiary of Al Faisaliah Group, signed an agreement yesterday to set up a 50-50 joint venture to sell Philips health care solutions and services across the Kingdom.
Prince Mohammed bin Khaled Al-Abdullah Al-Faisal, president and chief executive officer of the Al Faisaliah Group and Philips Chief Executive Officer Frans van Houten signed the deal.
The proposed transaction is subject to governmental approval and certain contractual and other closing conditions, and is expected to close in the first half of 2013. Financial details of the agreement were not disclosed.
The joint venture will combine Philips' strong health care portfolio, including medical imaging systems, patient monitoring devices and clinical information solutions, with FMS' recognized knowledge of the market requirements and strong position in Saudi Arabia, the largest economy in the Middle East by GDP.
The Saudi Arabian health care market is estimated to grow by 8 percent annually between 2013 and 2017, driven by targeted government spending on health services and hospital infrastructure.
"Through the partnership between Philips and Al Faisaliah Medical Systems, we combine Philips' clinical expertise and innovations, with Al Faisaliah Medical Systems' thorough knowledge of local customer needs and requirements supported with our talented staff and strong infrastructure," Prince Mohammed bin Khaled said.
"We expect that the joint venture (JV) will contribute to new levels of health care services for the people of Saudi Arabia."
Over the past 35 years, we have been working diligently on developing and investing extensively in health solutions and systems through Al Faisaliah Medical Systems, the prince said, adding that by partnering Phillips and Al Faisaliah Medical Systems, the two parties combine the strength of scientific research and innovations that Philips represents.
"By partnering with Al Faisaliah Medical Systems in a joint venture, Philips can accelerate its growth in the important Saudi Arabian market for health care products, services and solutions," said Houten. "We have built a strong and trusted relationship with FMS over the past 40 years, and with this joint venture we are now taking the next step to address important health care opportunities in a growth market."
The joint venture with FMS builds on Philips' ambition to better serve the needs of local markets and respond to the specific health care needs of the population in Saudi Arabia.
In addition, the joint venture will facilitate a focus on developing the next generation of skilled Saudi health care professionals through dedicated education and training programs.
Royal Philips Electronics is a diversified health and well-being company focused on improving people's lives through meaningful innovation in the areas of health care, consumer lifestyle and lighting.
Headquartered in the Netherlands, Philips posted 2011 sales of 22.6 billion euros and employs approximately 122,000 employees with sales and services in more than 100 countries. The company is a leader in cardiac care, acute care and home health care, energy efficient lighting solutions and new lighting applications, as well as male shaving and grooming, home and portable entertainment, and oral health care.
Al Faisaliah Medical Systems (FMS), a subsidiary of Al Faisaliah Group Holding Co., was founded in 1973 and based in Saudi Arabia with a vision to be the leading health care solution provider in the Middle East.
It is currently operating in 6 Gulf and Levant countries with 19 offices throughout the region and over 700 employees. FMS is a major player in offering optimized wide range of services, providing planning, identification, supply, management, and design services to any health care structure in any country through continuous collaboration and partnership with international health care leaders.
FMS' mission is to serve the health care community by offering innovative and quality solutions and services at competitive values to customers, and to leverage the quality of health care services in the region by being trendsetters and making the new de-facto standards. Through its patented CardioSpace program FMS dominates the market in turnkey cardiology projects in Saudi Arabia.


Lufthansa announces overhaul of budget carrier Eurowings

Updated 24 June 2019
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Lufthansa announces overhaul of budget carrier Eurowings

  • Lufthansa cited falling revenues at Eurowings as a major reason for its warning on full-year profits on June 16
  • Eurowings’ long-haul business would be managed by Lufthansa in the future

BERLIN: Lufthansa on Monday announced a turnaround plan for Eurowings in which the budget carrier will focus on short-haul flights and seek a 15 percent cut in costs by 2022 in the hope of returning to profit.
The German airline cited falling revenues at Eurowings as a major reason for its warning on full-year profits on June 16. Eurowings’ revenue was also forecast to fall sharply in the second quarter.
Lufthansa said its Eurowings fleet would be standardized on the Airbus A320 family and it would seek to boost productivity at Eurowings by limiting itself in Germany to one air operator’s certificate.
Brussels Airlines — the Belgian national flag carrier which Lufthansa took control of in 2016 — would not be integrated into Eurowings, Lufthansa said. A turnaround plan for Brussels Airlines will be announced in the third quarter.
Lufthansa also said it would start pegging its dividend payout ratio to net profit in the future to give the group more flexibility. It would pay out a regular dividend of 20 percent-40 percent of net profit, adjusted for one-off gains and losses.
Lufthansa said Eurowings’ long-haul business would be managed by Lufthansa in the future.
Carsten Spohr, Chief Executive Officer of Lufthansa, said Monday’s announcements sent “a clear signal that this company cares about its shareholders and tries to create value for them.”
Lufthansa said its Network Airlines — made up of Lufthansa, Swiss and Austrian Airlines — would aim to use innovations in sales and distribution to make a contribution to increasing unit revenues by 3 percent by 2022.
Network Airlines will aim to reduce unit costs continuously by 1 to 2 percent annually, the airline said.