Toshiba Australia rebounds to post AU$22.3m profit for FY2017

Despite the rocky financial status of Toshiba's global business, its Australian arm is in the black.
Written by Tas Bindi, Contributor

Toshiba Australia has reported after-tax profit of AU$22.3 million for the full year ended March 31, 2017, turning around the AU$23.1 million loss reported in the previous year.

While the Japanese conglomerate -- which makes flash memory drives, laptops, and semiconductors -- has delayed its global full-year financial report for the sixth time, its Australian arm has reported stable revenue of AU$140.1 million for the full year, a slight drop from the AU$140.3 million reported in 2016.

AU$16.4 million of its total revenue came from the sale of its PC business, while AU$23.7 million was due to the sale of its medical business.

Toshiba Australia had sent its parent company AU$180.6 million during the 2017 financial year; however, Toshiba HQ paid off AU$148.4 million in loan debt.

The company paid AU$5.6 million in income tax in 2017, more than five times the AU$1.1 million paid in previous corresponding period.

Cash and cash equivalents decreased by 29 percent from AU$4.1 million to AU$2.9 million in 2017.

Toshiba Corp suffered a $6.3 billion write-down due to rising costs at two Westinghouse nuclear projects in the US, wiping out shareholder equity and dragging the company to a full-year loss for the second year in a row.

In February, Toshiba chairman Shigenori Shiga accepted responsibility for the company's financial woes and resigned.

The latest postponement of Toshiba's full-year earnings report prompted an automatic demotion to the second rung of the Tokyo Stock Exchange, with the current extension valid until August 10.

The extension provides the company with more time for ongoing bankruptcy proceedings against its Westinghouse nuclear reactor business in the US.

Toshiba said it would be looking to cover some of the losses caused by the write-down by selling off its semiconductor business. Last month, it selected a Japanese government-backed consortium as its preferred bidder, which includes the Innovation Network Corporation of Japan, the Development Bank of Japan, and Bain Capital.

The company did not disclose terms of the potential deal, though some estimates indicate that it could be within the vicinity of $20 billion.

Toshiba also said in April that it was considering selling a portion or all of its Moorside development company NuGeneration, after France's Engie, formerly known as GDF Suez, backed out of the nuclear project, selling its stake back to Toshiba for approximately £111 million.

It was also reported that Toshiba president Satoshi Tsunakawa would be taking a pay cut to help keep the company afloat.

In 2015, Toshiba delayed planned earnings releases twice as it reeled from a 150 billion yen accounting scandal where the company overstated its profits over the course of seven years.

Former Toshiba president Hisao Tanaka and his predecessor Norio Sasaki quit in the wake of the scandal, which was blamed on management's overzealous pursuit of profit.

More than a year ago, as part of another major restructuring effort, Toshiba sold off its PC business and let go thousands of employees.

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