Toshiba sees return to profit after US$6.6b operating loss


TOKYO: Japan's Toshiba Corp said it expects to post an operating profit this financial year after a US$6.6 billion loss last year on large writedowns and restructuring costs in the wake of a damaging accounting scandal.

The industrial conglomerate forecast an operating profit of 120 billion yen (US$1.1 billion) for the current financial year, in line with an earlier estimate.

It booked an operating loss of 719.1 billion yen for the past financial year, hurt in particular by a US$2.3 billion writedown on its US nuclear unit Westinghouse to address lingering doubts over its accounting practices.

A US$1.3 billion book-keeping scandal last year pushed Toshiba to axe 14,000 jobs, sell its medical equipment business to Canon Inc and its white goods unit to Chinese household appliance giant Midea Group Co Ltd.

The sprawling conglomerate is keen to turn itself into a leaner company focusing on chips, nuclear energy and social infrastructure.

But the strategy increases Toshiba's exposure to the highly volatile chip market and makes the company more vulnerable to increasing uncertainties over global demand for nuclear energy which has shrunk in the wake of 2011 Fukushima disaster.

The company also needs to beef up its capital base, analysts say.

Toshiba has been on a Tokyo Stock Exchange watch list since last September after the bourse cited faulty internal controls, making it difficult for the conglomerate to raise funds through the sale of shares or bonds.

"We will consider a capital reinforcement strategy when the environment becomes appropriate," chief financial officer Masayoshi Hirata said at an earnings briefing.

Due to slowing global smartphone demand, Toshiba expects operating profit at its memory chip business to plunge to 24 billion yen this financial year from 110 billion yen last year.

Toshiba had hoped that its medical equipment business would drive growth but was forced to sell it in the wake of the scandal. 
Now it will have to search for new growth engines, analysts have said. - Reuters

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