Toshiba posts 12.3b yen Q1 income loss, 64b yen slump in sales

Japanese conglomerate Toshiba has posted a 12.3 billion yen net income loss, and has attributed its 64 billion yen sales slump to "risk factors" such as natural disasters and legal disputes.
Written by Asha Barbaschow, Contributor

Toshiba has recorded a first quarter net income loss of 12.3 billion yen due to a significant slump in television, home appliance, and computer sales.

For the three months ending June 2015, the Japanese conglomerate's net sales totalled 1,349.9 billion yen, 64 billion yen less than its 2014 first quarter net sales.

In its result statement, Toshiba attributed its loss to Japan's gross national product's negative growth, blaming "restrictive factors", which according to the company, included a decrease in consumer spending due to decline in real income and an export slump.

"The domestic economy did not show signs of acceleration because of sluggish performance by the small and medium sized businesses that depend on domestic demand, and the accelerating move to shift business operations overseas," Toshiba said.

"Since Toshiba Group is promoting business under various market environments in many countries and regions, they are subject to a number of their risks and uncertainties."

Toshiba "cautioned" shareholders on risk factors it felt impacted its results, such as major disasters including earthquakes and typhoons, lawsuits and disputes, changes in political and economic conditions both in Japan and abroad, as well as rapid changes in the supply and demand situation in major markets.

The company's poorest performing sector was its lifestyle products and services, such as PCs, home appliances, and LCD televisions, which saw 211.8 billion yen in total sales, 76.3 billion yen less than last year's first quarter total. In contrast, Toshiba's healthcare systems and services sector, which includes medical imaging systems and computerised tomography systems, recorded the highest sales growth, up 10 billion yen year-on-year to 81.5 billion yen in net sales.

Toshiba told shareholders it was not going to forecast any results at this point.

In July, Toshiba issued a statement apologising to shareholders, investors, and stakeholders after it received a report that highlighted accounting irregularities within the company and linked Toshiba executives to the overstatement of more than 150 billion yen in profits.

Later that day, the company's president Hisao Tanaka and his predecessor Norio Sasaki announced their resignations in the wake of the accounting scandal blamed on management's overzealous pursuit of profit.

At the time, the committee investigating Toshiba presented the conglomerate with a rebalanced seven-year earnings sheet, showing that cooked FY2008 and FY2009, as well as FY2011 through FY2014 results all contributed to the 150 billion yen overstatement of profits. In FY2012, the company allegedly added 85 billion yen to its year end earnings.

Toshiba also said in July that the announcement of any corrections relating to its previous results will be made after August 31.

In September, Toshiba cut 900 jobs in a bid to restructure its PC business and focus on the enterprise market. At the time, the company said the move was in order to "secure consistent profit". Toshiba also said that it was ramping up its business-to-business (B2B) offering by expanding its product range, which includes workstations and tablets, and diversifying its business partners. The tech giant also said it expected B2B sales to grow to over 50 percent in the fiscal year of 2016.

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