Toshiba reports highest profit in over two years
Toshiba Corp reported its second quarter profit, the company’s highest profit in over two years. The company is set to buy out three of its subsidiaries as it moves forward from a management crisis and accounting scandals.
Toshiba reported an operating profit of 44.23 billion yen ($405.41 million) for the second quarter that ended in September. On last year’s second quarter report, the company had a profit of 6.25 billion yen. The increase is attributed to cutting costs and reining in of low-margin infrastructure projects.
According to Refinitiv, analysts had an average estimate of 25.97 billion yen.
Toshiba’s profit forecast remains to be at 140 billion yen, compared to last year’s 35.4 billion yen.
The company announced to launch tender offers for Toshiba Plant Systems & Services, Nishishiba Electric, and NuFlare Technology to turn them into wholly-owned units. This is in light of some shareholders who pushed for more action to overhaul its asset portfolio.
The Japanese government has set corporate governance guidelines for publicly-traded parent companies who might have conflicts of interest with its subsidiaries.
Toshiba has focused on profits after the massive accounting scandals that led to the bankruptcy of US nuclear power unit Westinghouse.
The company has also overhauled its board to raise the number of external directors, including non-Japanese directors for the first time in 80 years, due to pressure from activist investors.
Toshiba’s five-year plan’s objective is 8-10% operating profit margin until March 2024. It aims to focus on energy, service businesses, and social infrastructure.