Toshiba logs surprise quarterly operating loss as costs surge

The emblem of Toshiba Corp. is seen on the firm’s facility in Kawasaki, Japan June 10, 2021. REUTERS/Kim Kyung-Hoon

TOKYO, Aug 10 (Reuters) – Toshiba Corp (6502.T) on Wednesday posted an sudden working loss within the first quarter because it grappled with a pointy rise in logistics and uncooked materials prices in addition to a worldwide chip scarcity.

Chief Monetary Officer Masayoshi Hirata advised reporters that the conglomerate’s first quarterly loss in two years got here amid jumps in costs for metal, copper in addition to parts sourced from suppliers.

“We’ve been capable of solely offset about half the affect of upper supplies and logistics prices with worth hikes,” he mentioned.

Its 4.8 billion yen ($35.6 million) loss in April-June compares with a revenue of 14.5 billion yen a yr earlier and a Refinitiv consensus estimate for a 19.4 billion yen revenue. Analysts had anticipated the conglomerate to profit extra from weak spot within the yen.

Low margins for power-related initiatives additionally weighed on its earnings and whereas Toshiba makes some forms of semiconductors, it wants to obtain different varieties utilized in its electronics and different merchandise from elsewhere.

Toshiba, nonetheless, caught with its annual revenue forecast for a 7% rise to 170 billion yen, saying it goals to cross on extra prices in product costs.

The scandal-laden Japanese industrial conglomerate, which is exploring going personal and different choices, final month chosen Bain Capital, CVC Capital Companions, Brookfield Asset Administration and a consortium involving state-backed Japan Funding Corp and personal fairness agency Japan Industrial Companions to proceed to a second bidding spherical. learn extra

A buyout of Toshiba may worth the agency at as a lot as $22 billion, sources have beforehand advised Reuters.

Tensions between Toshiba and its activist buyers culminated final yr when a shareholder-commissioned investigation concluded administration had colluded with Japan’s commerce ministry – which sees the corporate’s nuclear and defence expertise as a strategic asset – to dam abroad buyers from gaining affect at its 2020 shareholder assembly.

This yr, shareholders rejected management-backed plans to separate the corporate in two, prompting Toshiba to restart its strategic evaluate.

In additional information that displays poorly on its oft-criticised governance issues, Toshiba additionally mentioned on Wednesday it had discovered that an worker of a U.S. subsidiary, appearing on fraudulent directions from a third-party, had transferred $3.6 million to a checking account in Hong Kong. The case is presently beneath investigation.

($1 = 134.98 yen)

Reporting by Makiko Yamazaki; Modifying by Edwina Gibbs

: .