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2019/05/14 11:07:09

Financial performance of Toshiba

It is the overview of results of activity of Toshiba. The main article about the company - Toshiba Corporation.

Content

2018: Decrease in revenue by 6% to 3.69 trillion yens

For financial year which came to the end at the end of March, 2019 revenue of Toshiba made 3.69 trillion yens ($33.67 billion at the rate of for May 14, 2019) that 6% are less in comparison with previous year.

The annual turnover in the division of Toshiba Storage & Electronic Devices Solutions specializing in release of hard drives  rose by 2% and reached 900.9 billion yens. In the direction of Infrastructure Systems & Solutions  4 percent rise to 1.29 trillion yens is registered.

Financial performance of Toshiba
Financial performance of Toshiba

Other business was falling. For example, the division of Energy Systems & Solutions showed decrease in annual revenues by 22% to 652.7 billion yens. Sales of the products Industrial ICT Solutions sank for 2% and made 253.1 billion yens. For 7% revenue in division of Retail & Printing Solutions — decreased to 485.4 billion yens.

Toshiba specified that sales of HDD in a year were reduced because of decline in demand for such devices for personal computers. This recession could not compensate growth of sale of the equipment for corporate clients.

Toshiba completed year with net profit in the amount of 1.01 trillion yens ($9.2 billion) that for 26% exceeds an indicator of year prescription. A considerable part of growth of this indicator was provided by planned sale of division on production of storage devices of memory Toshiba Memory Corporation.

The management of Toshiba notes strong indicators of the business in the USA which was leveled by weakness of the European markets in view of uncertainty in connection with Brexit and also decrease in demand in China because of the trade conflict with the USA.

On May 13, 2019, when the annual accounts of corporation were published, its quotations dropped by 0.7%. Since the beginning of year they increased by 15.5%, and market capitalization grew to 1.96 trillion yens.[1]

2017: Disposal of losses for the first time for 4 years

For financial year which end fell on March 31 of the 2018th calendar revenue of Toshiba reached 3.95 trillion yens ($36.1 billion at the rate of for May 15, 2018) that is 4% less, than the previous year. Net profit was 804 billion yens (about $7.34 billion) whereas during three previous years it fixed losses.

Toshiba returned to profit thanks to sale to Westinghouse unprofitable company for $4.6 billion and also its debts for $2.16 billion Besides, to the Japanese conglomerate entry into the exchange of Landis+Gyr subsidiary company and considerable reduction of tax burden helped.

Financial performance of Toshiba (in yens)
Financial performance of Toshiba (in yens)

Sales reduction in Toshiba was explained with department of Landis+Gyr and fall of income in divisions of Energy Systems & Solutions and Infrastructure Systems & Solution. In the last revenue decreased by 1% to 1.2 trillion yens, and profit decreased to 48 billion yens.

In an Energy Systems & Solutions segment there was a 13 percent recession of sales to 844.7 billion yens. The best dynamics was shown by division of Industrial ICT Solutions (IT solutions for industrial enterprises) in which turnover increased by 8%, having reached 258.9 billion yens. In the direction of Storage & Electronic Devices Solutions revenue made 837.1 billion yens that is 5% more than an indicator of year prescription.

Follows from the financial statement that by the end of March, 2018 capital stock of Toshiba increased to 783.1 billion yens that allowed the company to remove threat of delisting of the actions with Tokyo Stock Exchange. The previous year the capital was negative (553 billion yens) that pushed corporation to sale of semiconductor business.

Toshiba calculates that sale of division on release of chips of memory will add to the profit of the company about 970 billion yens therefore net profit according to the results of financial year which will come to the end on March 31 the 2019th will jump by 33% to 1.07 trillion yens.[2]

2017: The strongest fall of stock quotations in 20 years (-26% in several hours)

On January 19, 2017 Toshiba endured the strongest falling of quotations of the actions more than in 20 years after mass media reported huge losses in one of divisions of the Japanese conglomerate.

According to the Nikkei newspaper, in the American nuclear business of Toshiba losses in the amount of 500 billion yens ($4.4 billion) are recorded. The news agency Kyodo specifies that the speech can go about losses to 700 billion yens ($6.1 billion).

View of Toshiba headquarters in Japan
View of Toshiba headquarters in Japan

Toshiba did not begin to comment on this information though at the end of 2016 the corporation warned about possible write-offs of several billion dollars in Westinghouse Electric subsidiary company in connection with an overexpenditure of means in nuclear projects in the American States of Georgia and South Carolina. Toshiba promises to call more exact amount of losses no later than the publication of the quarterly statement planned for February, 2017.

Bloomberg reports that news about severe losses provoked 26 percent recession of quotations of Toshiba in several hours that never was since 1974. By the end of day, on January 19, 2017, actions won back falling a little and to closing of the exchange 242 yens which is 16% less stopped on a mark, than was a day earlier.

As notes the The Wall Street Journal edition, by the end of September, 2016 equity of Toshiba was measured by 363 billion yens ($3.2 billion), and profit in October-December (especially in semiconductor business) could increase this amount. However losses in nuclear business nullified this income and led to the negative capital that can threaten share placing of the company on Tokyo Stock Exchange.[3]

For the purpose of strengthening of the capital of Toshiba sold a number of large assets earlier, including divisions on release of the medical equipment, home appliances and sensors of the image. The NHK TV channel reports that the company also considers sales opportunity of additional assets for the amount to 300 billion yens ($2.6 billion).

Besides, in January, 2017 Toshiba spoke about plans to separate from itself semiconductor business and, perhaps, to sell its part. According to Nikkei, Western Digital which for 200-300 billion yens ($1.77-2.66 billion) can purchase a 20 percent share in division on release of chips of Toshiba applies for this asset.

2016

Record losses in $8.3 billion

On May 15, 2017 Toshiba announced record losses in the history. Financial problems at the end of 2016 of a fiscal year are connected with huge write-offs in nuclear business.

For the 12-month reporting period which end fell on March 31, 2017 net losses of Toshiba reached 950 billion yens ($8.3 billion) that it is twice more, than the previous year. Revenue dropped almost by 6%, having made 4.87 trillion yens ($42.5 billion).

At the end of 2016 Toshiba warned about write-off of several billion dollars in Westinghouse Electric (is engaged in service of the NPP in the USA) in connection with an overexpenditure of means in some nuclear projects which resulted from purchase of CB&I Stone & Webster company (specializes in services of atomic construction and the integrated services). In March, 2017 Westinghouse Electric was declared bankruptcy.

Toshiba recorded the greatest losses in the history because of write-offs in nuclear business
Toshiba recorded the greatest losses in the history because of write-offs in nuclear business

The financial results published by Toshiba are not approved by auditors as they had questions because of purchase of CB&I Stone & Webster. It is worth reminding that the Japanese conglomerate transferred the publication of the report for the third financial quarter (October-December, 2016) because of disagreements with auditors twice. As a result of Toshiba also provided unconfirmed data as the third delay could lead to the termination of an exchange trading in shares of the company.

The delisting threat all the same remains as by the end of March, 2017 of Toshiba has a negative equity — minus of 540 billion yens ($4.8 billion). For the purpose of improvement of a financial position the corporation intends to sell semiconductor business and under control Swiss producer of Landis+Gyr counters.

Toshiba is going to return to profit according to the results of financial year which will last until the end of March of the 2018th calendar. The company expects net income at the level of 50 billion yens ($442 million).[4]

Debts in $10 billion and a delay from creditors

On January 10, 2017 it became known that Toshiba asked creditors about a debt payment deferral as the company needs money after severe losses.

According to the Reuters news agency with reference to the sources familiar with a situation, on January 10, 2016 the management of Toshiba met representatives of 80 creditor companies among which there was staff of regional banks and insurance companies.

The employee of Toshiba clicks in a management system for the nuclear reactor
The employee of Toshiba clicks in a management system for the nuclear reactor

During this action top managers asked creditors not to take away means from reserves which were replenished on a case of emergence of problems with debt repayment. At a meeting heads of Toshiba told about the forthcoming write-offs and terms during which the company intends to solve the arisen problems.

Toshiba confirmed to the edition a meeting with creditors, but refrained from additional comments.

At the end of 2016 Toshiba declared the probability of write-off of several billion dollars because of exceeding of expenses in the American nuclear company Westinghouse Electric which the Japanese conglomerate purchased in 2006.

According to the Nikkei edition, in connection with the forthcoming monetary losses creditors agreed to grant to Toshiba a delay for the beginning of return of loans till February, 2017. This month there will take place one more meeting of the management of corporation with creditors.

As of the end of September, 2016 the total debt of Toshiba made about 1.2 trillion yens ($10.37 billion). Debts of the company began to grow after the financial scandal connected with long-term overestimate of income.

After Toshiba warned about write-offs in nuclear business, stocks of the company for several days fell in price by 33%, and credit rating was lowered to the "garbage" level therefore over the producer the threat of the termination of issuance of credits by banks hung.

Then Toshiba began to consider different options of increase in the capital. Among them — new share issue and sale of semiconductor business.[5]

2015: Growth of losses by 10 times to $4.4 billion

On May 12, 2016 Toshiba published the report for work for 2015 financial year. The Japanese conglomerate recorded the repeated growth of losses because of huge expenses on the restructuring started in connection with scandal with overestimate of income.

For the 12-month reporting period which came to the end on March 31, 2016 net losses of Toshiba reached 483.2 billion yens ($4.4 billion) that more than by 10 times exceeds monetary losses of year prescription. The operating loss made 719.1 billion yens ($6.6 billion) whereas the previous year operating profit in the amount of 188.4 billion yens ($1.7 billion) was got.

Results of year of Toshiba: growth of losses by 10 times because of accounting scandal
Results of year of Toshiba: growth of losses by 10 times because of accounting scandal

Revenue of corporation in a year was reduced by 15%, having made 5.67 trillion yens ($51.9 billion). The analysts polled by FactSet expected from corporation operating and net losses at the level of 440 and 588.8 billion yens at sales in 6.1 trillion yens.

Financial decline of Toshiba is connected with write-off of 260 billion yens ($2.3 billion) of the asset cost of the American division of Westinghouse Electric (works in the field of nuclear power) because of the increased expenses.

Corporate restructuring which was begun in connection with the revealed long-term accounting frauds by means of which top managers of Toshiba illegally attributed the companies of $1.3 billion nonexistent profit became one more reason of fall of revenues of corporation. As a result of scandal the conglomerate is forced was to reduce jobs and to sell non-core divisions.

Analysts consider that Toshiba can successfully be recovered, however to it will be very difficult to come for steady growth. The company there is not enough money for investments in fight against Samsung Electronics in the market a flash memory while new purchase orders of nuclear facilities remain weak, experts say.

According to the results of financial year which will come to the end in March of the 2017th calendar Toshiba hopes for return to net profit, expecting it the size in 100 billion yens ($915 million), thanks to work of the divisions which are responsible for nuclear projects and production of chips of memory.[6]

2014: A loss in the amount of $318 million

On September 7, 2015 Toshiba published the annual financial report. His Japanese company had to publish at the end of April — the beginning of May, 2015. However date was postponed in connection with identification of accounting frauds.

In 2014 financial year which came to the end on March 31, 2015 Toshiba received net loss in the amount of 37.83 billion yens (about $318 million) against net profit in the amount of 60.24 billion yens ($506 million) the previous year. Before financial scandal the Japanese concern predicted annual profit at the level of 120 billion yens ($1 billion).

Toshiba received a loss in the amount of one third of one billion dollars
Toshiba received a loss in the amount of one third of one billion dollars

In April, 2015 Toshiba found errors in financial statements and initiated investigation which till August was made by group of independent auditors. They found out that the management of Toshiba purposely distorted financial performance that led to overestimate of profit for 155 billion yens ($1.3 billion) for the seven-year period, since 2008. These are three times more the amounts about which spoke in the company before audit. Profit before taxation was overestimated by 225 billion yens ($1.9 billion), follows from the message of Toshiba of September 7, 2015.

2014 financial year Toshiba completed with operating profit in 170 billion yens ($1.4 billion) which is 34% less than an indicator of year prescription. Sales of vendor for this period increased by 2.6% to 6.66 trillion yens ($54.8 billion).

After the publication of the reporting of a stock of Toshiba grew in price for 4.8%. However from the moment of the bringing to publicity of an incident with inaccuracies in financial results of quotation of the producer failed on a third.

Head of Shinkin Asset Management Co fund. Naoki Fujiwara says that, most likely, investors will not take the share of Toshiba as effects of financial scandal are unknown. Perhaps, the companies threaten claims and penalties from regulators, Fujiwara considers.

On September 30, 2015 Toshiba will hold an extraordinary meeting of shareholders at which new board members in exchange to the top managers dismissed for frauds with accounting will be selected.[7]

2011: Sales reduction to $76.3 billion

According to the results of 2011-2012 financial years Toshiba announced up to 6.1 trillion yens ($76.3 billion) decrease in net sales by 298.2 billion yens and arrived in the amount of 73.7 billion yens ($921.4 million) in comparison with a loss to 64.1 billion yens in 2010-2011 financial year.

In 2012-2013 financial year the Japanese producer of electronics, medical equipment and nuclear reactors was going to lock in profits on a mark of 135 billion yens ($1.7 billion). It is more, than expected to see the independent analysts on average expecting profit in the amount of 127.6 billion yens.

2007: Revenue of $76 billion, profit of $1.2 billion (-7%)

Revenue of the company in 2007 — 2008 financial year (ended on March 31, 2008) — $76.68 billion, net profit — $1.274 billion (decline by 7%). Losses are connected with failure in February, 2008 from further production of HD of DVD players and recorders — Toshiba lost in so-called "war of formats" of Blu-ray technology.

Notes