In the process of being acquired, Toshiba delivers disappointing forecasts

(Tokyo) The Japanese conglomerate Toshiba, on which a takeover offer by a Japanese consortium is in preparation, delivered not very rosy forecasts for its new 2023-2024 financial year after a fall in its profits over its past financial year.


Its net profit in 2022-23, ended March 31, shrunk 35% to 126.6 billion yen (C$1,266 million at current prices) and its operating profit fell 30.4% to 110.5 billion yen, according to a statement.

Its profits were particularly reduced by exceptional factors (provisions and depreciation of assets) in its computer storage (hard disks) and printing systems activities.

Its former memory chip subsidiary, now renamed Kioxia, in which Toshiba retains some 40% of the capital, has also contributed negatively to its results over the last two quarters.

Thanks to the diversity of its business segments, its total turnover was however almost stable (+0.7%) at 3,361.7 billion yen (22.8 billion euros).

The group expects operating profit to stagnate in 2023/24, citing rising fixed costs and restructuring costs to secure future growth.

He anticipates an annual net profit of 70 billion yen, but this objective does not include the future contribution – positive or negative – of Kioxia, whose business he is not involved in.

Toshiba also expects a 4.8% decline in annual sales to 3.2 trillion yen.

In March, the group lent its support to a takeover bid from a consortium of Japanese companies led by the fund Japan Industrial Partners (JIP), proposing to acquire the conglomerate for 2,000 billion yen (less than 14 billion euros).

This amount was then deemed unattractive by analysts. However, given its lackluster performance and earnings outlook, Toshiba and its shareholders probably don’t have much leeway to hope for better.

This takeover bid (OPA) should be launched at the end of July at the earliest, Toshiba repeated on Friday.

A former Japanese industrial and technological flagship with a century-old history, Toshiba has lost a lot of its luster since a huge accounts makeup scandal appeared in 2015 and serious financial difficulties afterwards.

The group has slowly recovered, but is much smaller than before, having had to part with many assets to survive. And he is also now very influenced by activist shareholders, who have been pushing for a takeover scenario for a long time.


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