Toshiba flags lower profit of 870b yen on energy ops costs
TOKYO: Struggling Japanese engineering firm Toshiba lowered its profit forecasts yesterday with rising costs weighing on its energy operations.
The fresh downgrade comes as the firm undergoes painful reforms to stay afloat after logging billions of dollars in losses from its disastrous acquisition of United States nuclear firm Westinghouse.
Having sold its lucrative chipmaking business, Toshiba also saw sharply lower operating profit over the past three quarters compared with the previous year, though proceeds from the sale boosted its net profit over the nine-month period.
For the year to March, Toshiba said it now expects a net profit of 870 billion yen (RM31.97 billion), down from a November estimate of 920 billion yen.
In May, the company issued its original annual net profit forecast at 1.07 trillion yen.
The drop was due in part to a so-called goodwill impairment associated with falling share prices of a subsidiary, but also higher costs at a domestic power transmission and distribution project, said the company.
Toshiba also cut its annual operating profit to 20 billion yen, while slightly increasing its annual sales projection to 3.62 trillion yen.
But a series of scandals and business losses in recent years have forced the company to withdraw from many operations, such as appliances and personal computers that gave it brand recognition.
To stay afloat, the cashstrapped group sold its lucrative chip business for US$21 billion (RM85.42 billion) to K.K. Pangea, a special-purpose company controlled by a consortium led by US investor Bain Capital.
Still, the company is scrambling to revive itself, having announced in November plans to slash 7,000 jobs, to scrap or consolidate some factories and reduce its subsidiaries, to liquidate a unit building a United Kingdom nuclear power plant, and to withdraw from a US-based liquid natural gas business.