The US department of health has cancelled an order for thousands of ventilators made by Dutch electrical firm Philips after taking delivery of one-third of the machines.

The deal to supply intensive care units with equipment for coronavirus patients was agreed in April and worth $647 million (€544 mln). Only 12,300 of the 43,000 ventilators had been delivered when the order was terminated four months early at the end of August.

Philips said it was unclear why the contract had been ended. The company denied that the decision was linked to an investigation into suspected overpricing and claimed the US authorities had confused different types of ventilator in their assessment of the cost.

CEO Frans van Houten said the lost business would have an impact on Philips’s fortunes, as the company reduced its earnings outlook for 2020.

‘Up until today we have delivered what we promised,’ he said. ‘We took on hundreds of new staff in our factories in the US and asked our suppliers to make a huge extra effort, all in response to the Covid-19 pandemic.’