Toshiba cut its annual earnings estimate after third-quarter profit slumped and its chief operating officer resigned over the inappropriate use of entertainment expenses.
The weak performance and the departure of Goro Yanase come at a time when the scandal-ridden industrial conglomerate is assessing a binding buyout proposal from a consortium led by private equity firm Japan Industrial Partners (JIP).
The sluggish results “would make it hard for a bidder to offer a high price [for a buyout],” said Yoshiharu Izumi, senior equity analyst at SBI Securities.
Hit by weak demand for hard disk drives from data centre customers, Toshiba said quarterly operating profit fell 88 per cent to 5.3 billion yen (€35m), far below the Refinitiv consensus estimate of Y37 billion.
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The business also took a large charge relating to an old project for its power generation systems business, as well as an appraisal loss on a further drop in printer unit Toshiba Tec’s share prices.
Its profit estimate for the year ending in March was cut by a quarter to Y95 billion yen.
Adding to the woes, Kioxia Holdings, a memory chip-maker 40.6 per cent owned by Toshiba, slipped to a net loss of Y84.6 billion in the quarter due to weak demand for personal computers and smartphones.
Toshiba said Mr Yanase had resigned over the inappropriate use of entertainment expenses in 2019 when he was an executive at a company unit. – Reuters
