Toshiba’s profit down 75 percent due to weak demand

Toshiba’s profit in the second quarter, related to electronics and many other businesses, decreased by about 75 percent. The company’s poor results have increased uncertainty about the deal to buy it. The company said that its business has been affected by the weakness in the hard disk market and some other reasons. It has slashed its profit forecast for the financial year ending March by almost a quarter.

Toshiba posted an operating profit of about 7.5 billion yen (about Rs 430 crore) for the July-September period. This is much lower than analysts’ estimates. Memory chip maker Kioxia Holdings, in which Toshiba holds a nearly 40 percent stake, reported a quarter of its sales this month compared to October. Production About 30 percent reduction has been reported. Smartphones and personal computers have been banned in many countries due to rising inflation and some other reasons. sales The reduction has had an impact on the chip market. Due to this, the results of chip-making companies may remain weak in the coming quarters.

Investors planning to buy Toshiba may find it difficult due to the weak results. Nikkei reported that a consortium led by private equity fund Japan Industrial Partners (JIP) has made a bid to buy Toshiba for about $15 billion. However, the situation regarding funding from the banks for this is not clear. Due to this, questions are being raised on the success of this bid. Japan Investment Corp, a government-owned fund, is also preparing a proposal for Toshiba. For this, the fund is in talks with American private equity fund Bain Capital and another fund to form a consortium.

Earlier this year, the company had to halt operations at its chip manufacturing plant in Oita in southern Japan due to an earthquake. Semiconductors used in cars and industrial machinery are made in this plant. System LSI chips are made in this plant, about 60 percent of which are sold to car makers and industrial machinery firms. Apart from this, the company also manufactures LSI chips at another plant in northern Japan.

(This news has not been edited by NDTV team. It is published directly from syndicate feed.)

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