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TMCNet:  Toshiba's FY 2013 net profit down 34% on stalled nuclear power project

[May 08, 2014]

Toshiba's FY 2013 net profit down 34% on stalled nuclear power project

(Japan Economic Newswire Via Acquire Media NewsEdge) Toshiba Corp. said Thursday its group net profit in the business year ended in March dropped 34.3 percent from the previous year to 50.83 billion yen, dragged down by a stalled nuclear power generation project in the United States following the 2011 Fukushima nuclear crisis.


But the major electrical machinery maker said its group operating profit rose 47.0 percent from the year before to 290.76 billion yen as sales expanded 13.5 percent to 6.50 trillion yen on brisk demand for its NAND flash memory used in smartphones and other digital products.

As for the home electronics sector including televisions and personal computers, the company incurred an operating loss of 51 billion yen due partly to expenses to dispose of TV inventory in the Europe.

For the current business year ending next March, Toshiba expects its group net profit to more than double to 120 billion yen, operating profit to rise 13.5 percent to a record 330 billion yen, on consolidated sales of 6.7 trillion yen, up 3.0 percent.

Senior Executive Vice President Makoto Kubo said the company aims to make the home electronics sector profitable in order to secure a record operating profit this business year.

"It's our minimum commitment to generate 330 billion yen" in operating profit, Kubo said at a press conference in Tokyo, adding Toshiba aims to expand profits led by exports amid overseas economic recovery including the United States and the Asian region, although concern about the Chinese economy remains.

As for the power and infrastructure business, Toshiba booked an operating loss of 31 billion yen after lowering the asset value of Nuclear Innovation North America LLC, a U.S. nuclear energy company in which the Japanese company invests, as construction of two nuclear reactors in Texas will be delayed, it said.

In the South Texas Project, Toshiba initially planned to build the nuclear power reactors with U.S. power company NRG Energy Inc. with an eye to starting operations from 2016 and 2017. But the U.S. company decided not to invest more money in the project following the nuclear crisis at the Fukushima Daiichi complex.

Kubo said U.S. authorities strengthened safety guidelines for building nuclear power reactors following the nuclear accident, but the project is "moving very smoothly" and the company does not expect to incur further losses.

(c) 2014 Kyodo News

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