Toshiba announces biggest loss
TOKYO: Japanese high-tech giant Toshiba Corp. announced Friday its biggest ever loss and warned it would remain mired in the red this year because of weak demand computer chips.
The group, which owns US nuclear plant maker Westinghouse, suffered a net loss of 343.6 billion yen (3.5 billion dollars) in the year to March, against a year-earlier profit of 127.4 billion yen.
It logged an annual operating loss of 250.2 billion yen, against a profit of 246.4 the previous year. Revenue slid 13 percent to 6.65 trillion yen.
"The economic downturn has appeared to hit bottom but we are not seeing a recovery yet," vice president Fumio Muraoka told reporters. "We cannot expect a rapid rebound."
He blamed the loss -- Toshiba's first in seven years -- on the global economic downturn, steeper than expected declines in semiconductor prices, and a stronger yen.
In the fiscal fourth quarter alone, Toshiba suffered a net loss of 184.0 billion yen, against a year-earlier profit of 1.25 billion yen.
The company's core semiconductor business fell into the red last year amid slumping demand for NAND flash memory chips used in portable digital music players and other gadgets.
Sales of nuclear energy systems were one bright spot in Toshiba's gloomy performance, helping its social infrastructure division to log an annual operating profit of 77.9 billion yen.
Toshiba said in March it was tapping vice president Norio Sasaki, an expert in nuclear power technology, to lead it through the crisis, underscoring its growing commitment to the energy industry.
The company is forecasting a net loss of 50 billion yen for the financial year to March 2010 on revenue of 6.8 trillion yen. But it aims to return to the black at the operating level with a profit of 100 billion yen.
The group, which is slashing thousands of jobs, plans to raise up to about 490 billion yen by selling shares and bonds to help pay for restructuring.
"With the significant deterioration in our finances, our stamina for structural reform is weak," said Muraoka.
"If we neglect to take action now, we will lag behind even if the global economy recovers. Speed is needed in the current conditions, and we have no time to lose," he added.
NAND flash memory prices fell 70 percent in the last fiscal year and are expected to drop 30 percent this year, Muraoka said.
But Toshiba expects the semiconductor business to start seeing an improvement in the second half of the year as demand picks up from China and South Korea, he added.
The digital products division is forecast to eke out a profit this year on sales of mobile telephones and hard disk drives, while the electronics devices segment is expected to show an improvement but still remain in the red.