TOKYO – The Toshiba group earned a record net profit of 804 billion yen ($7.3 billion) in 2017, its first positive balance in four years, thanks to the liquidation of its nuclear business in the United States and its tax reform.
The electronics and infrastructure conglomerate registered in the period spanning from April 2017 to March 2018, an operating profit of 64.1 billion yen – 21.8 percent less inter annually – after excluding the results of its chip unit, Toshiba Memory, from the financial report.
Toshiba has agreed to sell its profitable business to a consortium led by the US investment fund Bain Capital, as a measure to alleviate its financial problems.
Toshiba’s sales turnover fell 2.4 percent to 3.9 trillion yen due to low sales of its energy branch that could not compete with the higher sales recorded in its electronic devices and storage business, Toshiba explained in its report.
Toshiba also did not include its flash memory business, the second in the world in terms of market share.
The Japanese group highlighted the 53 billion yen profit which in 2017 gave its sales a favorable currency exchange, and the positive impact on its results of the tax deduction for companies in the US.
For the current fiscal year, which will end on March 31, 2019, Toshiba expects its net profit to grow by 33 percent to reach 1.07 trillion yen and its operating profit to increase 9.2 percent to 70 billion yen.
The company estimates, however, that its sales will fall by 8.8 percent to 3.6 trillion yen.
With its recovery and after avoiding incurring a negative equity for the second consecutive year, Toshiba Monday avoided being delisted from the Tokyo Stock Exchange (TSE), where it is operating in the second section since August 2017 following audit problems related to the collapse of its US nuclear business, Westinghouse.
Westinghouse declared bankruptcy in March 2017, and as a result pocketed 340 billion yen from the sale of assets and related businesses.
The shares of the company, which reaped profits from the first hour, shot up after the publication of its financial report, and at 1.00 pm they rose 3.46 percent in the TSE after reaching 5 percent.