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Toshiba Records Highest Profit in Two years

Japan’s Toshiba posted its highest quarterly revenue in two years on Wednesday and said it would buy out three of its public business units as the industrial conglomerate moves on from accounting scandals and an administration crisis.

Toshiba reported a much stronger-than-anticipated operating revenue of 44.23 billion yen ($405.41 million) for the second quarter ended September, up from 6.25 billion yen a year earlier, because it cut costs and reined in low-margin infrastructure projects.

That compared with a 25.97 billion yen average of 4 analysts estimation compiled by Refinitiv.

Toshiba maintained its profit estimate for the year ending March at 140 billion yen, against 35.4 billion yen a year prior, consistent with the target the company set in its five-year plan.

The corporate further stated it could launch tender offers for plant engineering agency Toshiba Plant Systems & Services, marine electrical systems manufacturer Nishishiba Electric, chip-making gear manufacturer NuFlare Technology to transform them into wholly-owned subsidiaries.

The step comes as some activist shareholders have pushed for more motion to overhaul its sprawling asset portfolio.

The Japanese government has further identified possible conflicts of interest between publicly traded parent corporations and their listed subsidiaries and set company governance tips for those corporations.

Toshiba has shifted its aim to profits from scale since massive accounting scandals that eventually led to the chapter of U.S. nuclear power unit Westinghouse and the sale of its prized memory chip subsidiary.

It has further renewed its panel to hike the number of external administrators and include non-Japanese directors for the first time in eight decades, bowing to pressure from activist investors.

 

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Michelle Campbell

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