By Bart H. Meijer

AMSTERDAM (Reuters) – Dutch health technology company Philips on Monday said it expected a good start to 2021 as demand for the hospital equipment needed to treat COVID-19 patients remained strong.

Philips said both core earnings and comparable sales had increased 7% in the last three months of 2020, driven by a 24% jump in sales at its Connected Care division, which supplies respiratory machines and monitoring and software platforms that allow remote care.

Adjusted earnings before interest, taxes and amortisation (EBITA) rose to 1.14 billion euros ($1.39 billion) in the October-December period, on 6 billion euros of sales.

That continues the strong recovery underway in the previous quarter, when the initial shock of the pandemic waned and hospitals rushed to buy equipment to treat the respiratory disease.

However, a fresh wave of global infections is leading hospitals to delay elective procedures and the installation of new equipment in other areas again, Chief Executive Frans van Houten said.

He remained upbeat for 2021 though, saying orders were only pushed back, and not cancelled.

“Orders are still coming in, it’s just a matter of timing when that will turn into revenue. We expect a good start of the year”, he told reporters.

Philips shares rose 3% in early trading in Amsterdam, as ING analysts called the results a “small beat” versus expectations.

Total new orders increased 7% in the last three months of 2020, taking order growth for the year up to 9%.

“We continued to gain market share in our healthcare businesses, and ended the year with a strong order book,” Van Houten said.

Philips confirmed its outlook for “low-single-digit comparable sales growth” in 2021, as demand for COVID-19 equipment is expected to cool down.

The first half of 2021 is expected to be relatively strong, Van Houten said, due to the comparison with the first months of last year when hospitals delayed investments and demand for consumer products was crippled as the virus took hold.

(Reporting by Bart Meijer; Editing by Tom Hogue, Sherry Jacob-Phillips, Kirsten Donovan)