Toshiba announces 94% drop in operating profit for the six months to September from a year earlier

Toshiba announced on Friday that operating profit for the six months through September fell 94% from a year earlier and cut its full-year forecast, as investors closely watched the progress of Toshiba's privatization.

Toshiba's operating profit for the period hit 2.7 billion yen ($19 million), while sales rose 3.2 percent to 1.6 trillion yen. Meanwhile, its net profit totaled 100 billion yen, up 68%, thanks to Kioxia's contribution.

Toshiba said results were weaker across the board as both its energy business, which includes thermal power plants, and its retail business, which includes point-of-sale terminals, posted losses. The company also wrote down the value of its 29% stake in POS terminal provider Toshiba Tec after the share price fell.

Meanwhile, the hard drive business has been hit by a sharp slowdown in investment by cloud service operators and provision for product defects for major customers.

The forecast for the full fiscal year ending in March 2023 was cut to 125 billion yen from 170 billion yen in operating profit, and 190 billion yen in net profit from 200 billion yen.

A Japanese consortium led by JIP offered to buy the company for about 2.2 trillion yen, roughly in line with Toshiba's current market value.

Toshiba shares closed at 4,950 yen per share on Friday. The price was down 8% from its June high of 5,938 as investors tempered expectations for a high-priced takeover offer. Banks are wary of financing leveraged buyouts after the collapse of auto parts supplier Marelli, owned by Kohlberg Kravis Roberts, in July.

Toshiba has been exploring strategic options, including going private, since the formation of the special committee in April, as management failed to win the confidence of activist shareholders in the company's direction.