As chips and commodities sink Toshiba’s accounts
Japanese conglomerate Toshiba reported losses in the April-June quarter, contrary to analysts' expectations. Here are numbers and causes
Today Toshiba, the Japanese conglomerate focused on electronics, released its results for the first quarter of the financial year 2022, which report a loss of 4.8 billion yen (equal to 35.6 million dollars).
THE CAUSES
This is the first quarterly loss in two years, due to three factors: the shortage of microchips, which has been going on for a long time; the increase in logistics costs, given the frequent hitches; the rise in the prices of raw materials such as copper and steel.
THE WORDS OF THE FINANCIAL DIRECTOR
Chief Financial Officer Masayoshi Hirata told the press that Toshiba has only been able to "offset the impact of rising costs of materials and logistics in half through rising prices."
THE DATA
In the April-June period, Toshiba reported a loss of 4.8 billion yen, while a year earlier it had recorded a profit of 14.5 billion. Analysts also expected a profit of € 19.4 billion for the quarter just ended thanks to the weakness of the Japanese currency.
Instead, the reduced margins for energy-related projects weighed on the conglomerate's earnings, summarizes Reuters . Although Toshiba then produces some types of semiconductors, it must source the types used in electronic products elsewhere.
FORECASTS
Despite last quarter's negative results, Toshiba maintains its forecast of a 7 percent increase in annual earnings, to 170 billion yen, explaining that it wants to pass the increase in manufacturing costs onto products.
Toshiba, however, has maintained its forecast of a 7% annual earnings increase to 170 billion yen, saying it wants to pass more costs onto product prices.
THE FINANCIAL MANEUVERS OF TOSHIBA
Last month, Toshiba selected a number of financial firms – Bain Capital, CVC Capital Partners, Brookfield Asset Management plus a consortium that includes state-owned Japan Investment Corp – for a second round of bidding. The conglomerate is considering withdrawing its listing on the stock exchange.
According to Reuters sources, the buyout of Toshiba could bring the company's valuation to $ 22 billion.
CONTRASTS WITH SHAREHOLDERS
Toshiba has a turbulent history with its foreign shareholders, who together own nearly 30 percent of the shares. In 2021, an investigation conducted at the request of shareholders found that Toshiba was colluding with the Japanese Ministry of Commerce, intent on preventing foreign shareholders from gaining greater influence over the company. The Tokyo government considers Toshiba a strategic company due to its defense technologies and nuclear energy.
This year, however, shareholders rejected the conglomerate's plans to split into two companies .
NEW GOVERNANCE PROBLEMS
Arguably compounding Toshiba's already poor reputation for governance, the company said it found that an employee of its US subsidiary who was employed by a US subsidiary transferred $ 3.6 million to a bank account. in Hong Kong, acting on fraudulent instructions from a third party.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/toshiba-risultati-trimestre-aprile-giugno-2022/ on Wed, 10 Aug 2022 14:00:08 +0000.