TOKYO -- Toshiba posted a 104.4 billion yen ($953 million) operating profit in the fiscal year ended March, down 20% from the previous year as the COVID-19 pandemic hit the Japanese industrial conglomerate's bottom line, the company said Friday.
Toshiba's operating profit recovered in the January to March quarter, reversing a loss in the April to June quarter last year.
After years of clashes with activist shareholders over the company's governance and growth strategy, Toshiba is attempting a reboot, as former President and CEO Satoshi Tsunakawa again takes the reins.
For the fiscal year ending March 2022, the company forecasts revenue of 3.25 trillion yen and an operating profit of 170 billion yen, up 62.8% from fiscal 2020, under a new management team led by Tsunakawa, who replaced Nobuaki Kurumatani last month as president and CEO.
Toshiba, however, still faces the same challenge as under Kurumatani: It must satisfy shareholder demands for higher returns while investing in new growth businesses for the future.
Up for grabs: Global private equity firms are vying for control of Toshiba. © Reuters "Upon appointment as the president and CEO, my most important mission is to make the utmost efforts to earn the trust and improve relationships with all stakeholders," Tsunakawa emphasized at the beginning of a media conference on Friday.
Tsunakawa said that the company's mid-term plan for the fiscal year 2022 to 2024 was now under revision and would be announced in October. While the basic concept of its Toshiba Next Plan, formulated three years ago to cover five years from 2019, would stay the same, the revision would be made in response to the changing business environment, taking into account the pandemic, the U.S.-China trade tensions and momentum towards decarbonization.
Based on the Tokyo government's goal to achieve carbon neutrality by 2050, "new industries will have to be created [in Japan] and there will be huge growth opportunities for Toshiba," said Tsunakawa. He suggested that infrastructure and renewable energy related businesses would be the company's long-term growth pillars. He added that there were already higher orders for semiconductors and these would grow further due to demand for energy saving.
Toshiba on Friday also announced the setting up of a new strategic review committee to advise the board of directors on enhancing Toshiba's corporate value, by considering business and financial strategies. The committee would listen to the opinions of the shareholders and explain board resolutions to them, with the intention of improving the "quality and quantity" of shareholder engagement, said Tsunakawa.
Global private equity fund CVC Capital Partners has shelved a Toshiba buyout offer. Others have also expressed interest in acquiring the company.
One big Toshiba shareholder, 3D Investment Partners, sent an open letter to the board in April, saying steps to review strategic alternatives, including an alternative ownership structure to enhance corporate value, would be "a critical first test of the new leadership."
"In order to enhance corporate value, we would like to sincerely consider various proposals," said Tsunakawa.
Regarding an announcement about a cyber attack on Toshiba's subsidiary Toshiba Tec on Friday, Masaharu Kamo, Toshiba's corporate senior vice president, explained that the attack was limited to the subsidiary. While the two companies shared technical and security information, they used separate networks, he said.