Toshibas operating profit fell 94 in six months
Hardware

Toshiba’s operating profit fell 94% in six months

Toshiba today announced its results for the last quarter and the first half of the fiscal year (April to September). It turned out that operating income fell 94% from the same period last year, and the company had to revise its forecasts for the year amid negotiations to sell the company to Japanese investors.

    Image source: wen_xiao/unsplash.com

Image source: wen_xiao/unsplash.com

Operating profit for the half year was 2.7 billion yen (US$19 million), while revenue rose 3.2% to 1.6 trillion yen (about US$11.48 billion) compared to the same period last year. At the same time, net income was 100 billion yen, or about $717.4 million, and grew 68% on the success of Kioxia, a company partially owned by Toshiba that makes flash memory chips.

The results were worse than expected, as losses were recorded in various business areas around thermal power plants or, for example, trading terminals. The company also announced a fall in the value of Toshiba Tec, which supplies POS terminals, after the unit’s share price fell. Meanwhile, the hard drive business is declining due to the rapid decline in investment from cloud operators, as well as other issues including those related to the growing popularity of SSDs.

Forecasts for the entire calendar year ending March 2023 had to be revised. If 170 billion yen (about 1.2 billion US dollars) in operating profit was previously expected, it is now assumed to be only 125 billion yen (896.8 million US dollars) and the net profit forecast is down from 200 billion yen (US$1.4 billion) to 190 billion yen (US$1.36 billion).

The results come amid talks to take the company private — a Japanese consortium led by Japan Industrial Partners (JIP) made a purchase offer for around 2.2 trillion yen ($15.8 billion), roughly the current market capitalization from Toshiba.

As of Friday’s close, the company’s stock was down 8% from its June high, and the banks behind the investors are very cautious about the possibility of funding the deal and have yet to give their final approval. While the company is considering various options. In April last year, a purchase offer was received from private equity firm CVC, but it was rejected because key details were missing from the proposed transaction. Details on the available offers and the progress of the sale process have not yet been announced.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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