Wed, May 16, 2018 - Page 10 News List

Struggling Toshiba back in the black

AFP, TOKYO

Toshiba Corp chief executive Nobuaki Kurumatani attends a news conference at the company’s headquarters in Tokyo yesterday.

Photo: Reuters

Struggling Japanese conglomerate Toshiba Corp yesterday said it had bounced back into the black after a disastrous year and would avoid a humiliating delisting from the Tokyo Stock Exchange.

“We were able to exit from a critical situation by eliminating excessive debt at the end of March,” Toshiba chief executive Nobuaki Kurumatani told a news conference. “I personally regard it as the starting line for us ... for transforming into an excellent company that can survive competition with global excellent companies.”

The firm said it had booked a record net profit of ¥804 billion (US$7.3 billion), compared with a loss of ¥965.7 billion a year earlier.

That marks the first net profit for the firm in four years and was helped by one-off revenue from tax cuts linked to the sale of its nuclear units.

However, operating profit dropped 21.9 percent to ¥64.1 billion, while sales declined 2.4 percent to ¥3.95 trillion.

Toshiba had been on the ropes after its disastrous acquisition of US nuclear energy firm Westinghouse Electric Co, which racked up billions of dollars in losses before being placed under bankruptcy protection.

Those losses came to light as the group was still reeling from revelations that top executives had pressured underlings to cover up weak results for years after the 2008 global financial meltdown.

To survive and avoid delisting, the cash-strapped group decided on the multibillion-dollar sale of its prized chip business to a consortium led by Bain Capital.

The chip unit brought in about 90 percent of Toshiba’s total operating profit in the first six months of the last fiscal year and was the crown jewel in a vast range of businesses ranging from home appliances to nuclear reactors.

At the time the deal was seen as crucial to keeping it afloat after multibillion-dollar losses.

Toshiba yesterday said it was still waiting for Chinese antitrust authorities to approve the key sale, but denied speculation that it was considering reversing course in the deal.

In November last year, Toshiba said it planned to raise ¥600 billion by issuing new shares, a move aimed at avoiding delisting even if the chip sale was delayed.

The firm said it expected a net profit of ¥1.07 trillion for the year to March next year, up 33.1 percent from the previous year, on sales of ¥3.6 trillion.

Investors cheered the results, with Toshiba shares closing up 3.46 percent at ¥299 in Tokyo.

Tokyo-based Ace Research Institute analyst Hideki Yasuda warned that the sale of the chip business would be crucial.

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