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Toshiba sees record quarterly net profit after chip unit sale

Headquarters of Toshiba Corp. in Tokyo's Minato Ward (Mainichi)

TOKYO (Kyodo) -- Toshiba Corp. reported Wednesday a record quarterly net profit in the April-June period, largely due to the sale of its chip unit to a Japan-U.S.-South Korean consortium to bolster its financial standing.

The Japanese conglomerate's group net profit totaled 1.02 trillion yen ($9.16 billion) in the first quarter, representing a 20-fold increase from a year before.

Among 400 major firms listed on bourses operated by Japan Exchange Group Inc., it is the first time since 2004 a company's net profit on a quarterly basis has exceeded 1 trillion yen, according to Nomura Holdings Inc.

But Toshiba's group operating profit and sales in the period fell, indicating it needs to find other sources of revenue to replace the profitable Toshiba Memory Corp., which was sold for 2 trillion yen in June. Its gain on the sale of the unit was 966.4 billion yen.

Its group operating profit dropped 94.5 percent from the previous year to 730 million yen, dragged down by a poor performance in the energy segment, in particular its nuclear and thermal power businesses. Sales dropped 7.3 percent to 842.28 billion yen.

For the current fiscal year ending next March, the company maintained its earnings forecast, continuing to expect operating profit to increase 9.3 percent to 70 billion yen and net profit to rise 33.1 percent to 1.07 trillion yen, on sales of 3.60 trillion yen, down 8.8 percent.

After gaining regulatory approvals, Toshiba completed the sale of Toshiba Memory to the consortium led by U.S. private equity firm Bain Capital in June.

The consortium also includes South Korean chipmaker SK Hynix Inc. and Japanese optical glass maker Hoya Corp.

Toshiba also said Wednesday it will unveil a new management strategy in November covering the next five years through March 2024.

The strategy will focus on how it plans to achieve sustainable growth following the selling of its crown-jewel unit that contributed some 90 percent of its operating profit in the previous year.

Toshiba is slowly recovering from huge losses stemming from U.S. nuclear unit Westinghouse Electric Co., which filed for bankruptcy protection in March 2017.

In addition to the sale of Toshiba Memory, it introduced a slew of revamping measures last year such as raising 600 billion yen through a third-party allocation of new shares.

In the last fiscal year, the company returned to profitability for the first time in four years. Because it did not fall into negative net worth for a second consecutive year, it avoided being delisted from the Tokyo Stock Exchange.

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