DEMAND for flat screen televisions has helped Dutch electronics group Philips make a good start to the year.

The company recorded pre-tax profits of £360m in the first three months of the year, compared with losses of £45m in the same period last year.

The company's joint flat screen television venture with South Korean company LG Electronics, which has a plant in Belmont, on the outskirts of Durham, contributed £140m to the profits.

At the beginning of this month, that operation announced plans to cut 92 jobs from its 840 workers, despite a decision to invest £3m in equipment for the plant.

That followed the closure of LG Philips' operation in Washington, Wearside, in October, with the loss of 119 jobs, and the closure of a plant in Newport, Wales, with the loss of 870 jobs in August.

Philips recorded a two per cent growth in sales in the first quarter of the year, up to £4.35bn, despite a slight drop in the UK of £4.5m to £180.6m.

The group's sales in Europe and Africa were down slightly on last year, with weaker trading in Spain, the Netherlands and France. Meanwhile, Germany posted strong like-for-like growth.

The US also saw sales fall by nine per cent because of the effect of the weaker dollar.

However, sales in the Asia Pacific region rose 18 per cent despite weaker currencies.

The group said it was back on a stable footing and said it expected that trend to continue throughout the coming 12 months.

Philips, which employs about 3,000 staff in the UK, posted growth at all its main units, including lighting, domestic appliances, consumer electronics and with medical systems.

However, its computer chip unit was still loss-making despite a rise in sales.

The group's president, Gerard Kleisterlee, said: "Our results and our order books indicate that the company is on a more stable footing now, and we should see this trend continue through the rest of 2004."

Mr Kleisterlee said the company, which has undergone restructuring since 1991, would now start moving towards expanding its operations.

In recent years, it has cut back its loss-making operations in order to focus on its core businesses