Chip machinery maker ASML said on Wedneday it had booked net profit of €2.6bn on record sales of €10.9bn in 2018 and plans to increase its dividend by 50%.

However, the first quarter of 2019 will see sales slip back, partly due to production problems caused by fire at key supplier Prodrive.

The company expects to book sales of €2.1bn in the first three months of this year, compared with €3.1bn in the final quarter of 2018.

Describing the market as ‘challenging’, chief executive Peter Wennink said in a statement that ‘despite some uncertainty in the current environment, we remain confident about our sales and profit targets for 2020 and beyond.’

ASML also said on Wednesday it had signed an agreement to settle its legal dispute over alleged patent infringements that were initiated by Nikon. The Dutch firm said it had taken a €131m provision in its 2018 accounts to cover the dispute.