Toshiba expects losses of several hundred billion yen

The prime factors behind the losses are the deteriorating profitability of its major semiconductor business and the high cost of implementing structural reforms. 

The deficit may surpass the company’s record of 398.8 billion yen (Bt119 billion), seen in the business year ended in March 2009 and caused by the economic downturn precipitated by the Lehman Brothers bankruptcy. 

It is highly likely the company’s operating profit will also go more than 200 billion yen into the red, multiple sources related to Toshiba said on Friday. Besides restructuring its businesses, including its personal computer operations, Toshiba has started to consider selling its listed subsidiary Toshiba Tec Corp, which deals with business equipment such as printers.

Toshiba has not released its financial forecast for the full business year following the revelations of its inappropriate accounting, but the company plans to disclose the forecast together with its structural reform plans tomorrow. 

Toshiba intends to recover its performance next year by conducting reforms even if it means continuing to run a large deficit.

Toshiba will see its second straight year of after-tax deficit following the business year ended in March, when its deficit was 37.8 billion yen after revising its improperly inflated past profits. 

Among Toshiba’s main businesses, the market for flash memory storage chips used in smartphones and other devices is rapidly deteriorating. It is also performing poorly in the home electric appliance business.

Toshiba has also decided to sell its overseas plants that are producing slow-selling large electric appliances, such as refrigerators and washing machines, and also televisions. 

The company is also seeking to integrate its PC business with those of other companies such as Fujitsu and is considering scaling down its business facility in Ome, western Tokyo, which is a centre for developing home appliances.