Toshiba slashes losses, eyes a return to profits this year

The company saw improvements in business in the second half of the year

Toshiba managed to recover from deep losses of two years ago and moved close to break-even in the year to March, it said Friday. The company reported smaller losses or better profits at all of its key business units despite an across-the-board drop in sales.

Net loss for the period from April 2009 to March 2010 was ¥19.7 billion (US$212 million), which is a significant improvement on the ¥343.6 billion loss it reported the year earlier. Net sales came in at ¥6.4 trillion, down 4 percent on the year.

The better results are due in part to a round of cost cutting and cost-reduction measures that Toshiba imposed as the financial year began in April 2009. Business was also helped by slightly better economic conditions in the second half of the year, the company said.

The biggest improvement was seen in Toshiba's electronic devices business, where operating losses were cut by more than 92 percent to ¥24 billion. Memory chips enjoyed higher sales and profits during the year but the LCD business recorded a weak performance. The unit includes Toshiba's component business and saw a slight drop in overall sales of 1 percent.

In the digital media business, sales were helped by strong demand for flat-panel TVs in Japan and the acquisition of Fujitsu's hard-drive disk business. But overall sales fell by 4 percent, partly due to price competition in the laptop PC market and a drop in demand for cell phones. Despite the sales drop the business returned to profitability and reporting operating income of ¥13 billion.

The biggest contributor to profits was Toshiba's social infrastructure division, which includes its nuclear power business. Orders for new nuclear power plants and maintenance and service contracts helped push up social infrastructure sales while profits were helped by the higher sales.

For the current year, Toshiba expects a net profit of ¥70 billion on net sales of ¥7 trillion. It expects sales to rise across the board and for profitability to return to the electronic devices business on the back of a healthier market for semiconductors and LCD screens. Toshiba also expects to see higher profits in the digital media sector thanks to improvements in the performance of its PC business.

Tags toshibafinancial results

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Martyn Williams

IDG News Service

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