Toshiba incurs 12.2 bil. yen net loss in April-June

Sep 17, 2015

Toshiba Corp. announced on Monday a group net loss of 12.27 billion yen ($102 million) for the April to June period, as poor sales of its home appliances and personal computers hurt the bottom line amid an accounting scandal.

It is the first time in three years Toshiba has marked a red-ink figure for the three-month period. It reported a profit of 16.73 billion yen a year earlier.

In the first quarter of fiscal 2015 ending in March, the company incurred an operating loss of 10.96 billion yen, against a year-earlier profit of 47.67 billion yen, on sales of 1.35 trillion yen, down 4.5 percent.

The Japanese conglomerate did not give an earnings outlook for the full year through March 31, amid uncertainty stemming from the scandal.

The earnings results show challenges for Toshiba to make its mainstay businesses profitable after years of inappropriate accounting practices that were described by a third-party investigation panel as "systematic."

The lifestyle business -- a unit that sells personal computers, televisions and home appliances -- saw an operating loss of 20.7 billion yen. Its energy and infrastructure unit that deals with nuclear power plants recorded 10.7 billion yen in operating loss.

On the bright side, the health care sector logged 100 million yen in operating profit, and its electronics devices sector that sells semiconductors 35.6 billion yen.

The Tokyo and Nagoya stock exchanges said Monday they will put Toshiba shares on a watch list Tuesday to urge it to strengthen internal controls, and imposed combined 186 million yen in fines on the Japanese industrial conglomerate.

Toshiba needs to submit a report on enhanced internal control measures to the bourses in a year's time.

"We take the decisions (by the bourses) seriously," Toshiba President Masashi Muromachi said at a press conference in Tokyo, as he offered an apology.

Muromachi said his company will make "all-out efforts" so Toshiba shares will be removed from the list as soon as possible, and regain trust by putting a proper internal control system in place.

The earnings release came months later than usual, as improper accounting practices spanning nearly seven years forced Toshiba to measure their impact on its earnings.

Toshiba said earlier this month it had found earnings before tax were overstated by 224.8 billion yen and its net balance by 155.2 billion yen.

The company's delayed earnings report for fiscal 2014 ended in March showed the maker of products ranging from semiconductors to nuclear plants incurred a group net loss of 37.83 billion yen, a huge reversal from its 60.24 billion yen net profit in the previous year.

Muromachi has vowed to get Toshiba back on its feet and regain trust, as the 140-year-old company aims to improve corporate governance by having the majority of its new board composed of outsiders.

Source: Kyodo News