by Toshiba operating profit drops 90%, CEO resigns over misconduct
Tech’s results were well below analysts’ consensus. In addition to the quarterly accounts, the company said its operations manager resigned for breaching expense reporting rules.
Toshiba’s operating profit fell 90% to 5.3 billion yen (37.6 million euros at current exchange rates) between October and December, well below analysts’ consensus of 38 billion yen, according to S&P Global Market Intelligence (approx. 270 million euros).
The results were penalized by a drop in the performance of the hard disk segment, due to a decrease in demand. In addition, Toshiba was affected by the decline in the share price of subsidiary Toshiba TEC, recording a 10.2 billion yen impairment.
Looking ahead to the rest of the financial year (which ends in March), the Japanese conglomerate again cut profit forecasts for the second time since November, hoping to achieve a profit of 95 billion yen. The company resorted to the company’s poor performance to justify this new valuation.
The results come at a time when the Japanese group is rocked by controversy and shortly after it received a takeover offer from a consortium led by Japan Industrial Partners, which offered $15 billion (about 13.92 thousand euros) to buy Toshiba.
If the proposal is approved by Toshiba’s board and shareholders, it would end an eight-year history of problems that has brought the group to the brink of collapse.
This Tuesday, Toshiba chairman Akihiro Watanabe assured in a statement that the company will conduct “necessary negotiations” taking into account the “interest of shareholders and other stakeholders.”
In addition to financial problems, the company is also going through a reputational crisis. The company announced that its chief operating officer (COO), Goro Yanase, resigned after auditors discovered that the executive repeatedly presented the company with “entertainment expenses,” without mentioning the other participants in those events.
The alleged wrongdoing took place in 2019 when Yanase was still a board member of a Toshiba subsidiary and thus before he was still a director of operations.
