Thu, Feb 15, 2018 - Page 10 News List

Toshiba tips return to black as it sells units


Troubled Japanese conglomerate Toshiba Corp yesterday said it would swing into the black for the full fiscal year as it completes the multibillion-dollar sale of its chip business to restore its balance sheet.

The Tokyo-based firm said it expects a net profit of ¥520 billion (US$4.9 billion) for the year to next month, reversing a net loss of ¥966 billion a year earlier.

Toshiba, which had earlier expected a full-year loss, upgraded its bottom line estimate as it factored in a drop in tax expenses associated with the sale of the prized chip business to a consortium led by Bain Capital LP.

The upward revision was also helped by the sale of US nuclear energy firm Westinghouse Electric Co, which had long pressured Toshiba’s earnings because of its massive losses.

Among other factors behind the revision was last year’s issuance of 2.28 billion new shares to raise a total of ¥600 billion, a move aimed at avoiding a humiliating delisting from the Tokyo bourse.

“These outcomes have sufficiently addressed the material events and conditions that raised substantial doubts about the company’s ability to continue,” Toshiba said in a statement.

The firm made its forecast as it announced that in the nine months to December last year it saw a net profit of ¥27 billion, reversing a ¥532.5 billion loss for the same period last year.

Earlier in the day, Toshiba announced Nobuaki Kurumatani, former deputy president of Sumitomo Mitsui Banking Corp, would take over as its new chief executive officer.

Current chief Satoshi Tsunakawa is to stay on as chief operating officer, the company said.

“Any excellent company has had difficult times in its history and Toshiba has had an extremely difficult time in recent years,” Kurumatani told reporters. “I think Toshiba can revive itself as a stronger company.”

The replacement came as Toshiba said it had uncovered further accounting irregularities, this time at its Toshiba TEC Corp’s overseas unit.

Workers inflated profits to the tune of 4.7 million (US$5.81 million) euros, Toshiba said, adding that it would work to “further strengthen our internal management.”

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