On Thursday, Toshiba Corp reported a first-quarter operating profit that corresponded with the estimates of analysts, bolstered by the reduction of costs and recovery from a pandemic-driven hit to demand.
The multinational conglomerate, which has its headquarters in Minato, Tokyo, posted an operating profit of 14.53 billion yen ($132 million) for the April-June quarter, reversing a year-earlier loss of 12.64 billion yen. This puts the company’s first quarter operating profit at a very close range with the 14.90 billion yen estimated by analysts.
Toshiba, known for providing various products in IT and communications along with electronics, maintained its annual profit forecast at 170 billion yen.
In June, after weeks of takeover discussions sparked by private equity firm CVC Capital Partners’ $21 billion acquisition bid, Toshiba began a strategic review committee to look at its assets and examine options for the business, including proposals to take it private, angering some shareholders.
Pressure came from 3D Investment Partners and other investors to conduct a full strategic review and explore any serious interest in the company to rebuild shareholder trust. Toshiba said that it deemed the CVC proposal insufficiently detailed to evaluate, and appointed investment banking company UBS as a financial adviser, with plans to consider potential offers, without committing to a transaction.
In a rare move and a victory for activist investors, Toshiba Corp. shareholders voted down the reappointment of the board chairman at the annual shareholders meeting held in June, after corporate governance issues at the company were brought to the fore by a government collusion scandal.
Chief Executive Officer Satoshi Tsunakawa, said the company will do its utmost to improve relationships with a wide range of shareholders and will consider any proposals that improve shareholder value, including going private. The company is currently in the process of selecting candidates for additional board members and for potential successors to its interim chairman and CEO.
Toshiba is putting in great efforts to boost profits in businesses that it sees as having high profitability potentials, such as batteries and power management devices. The first-quarter profit represents less than a tenth of the company’s projected annual profit, but Toshiba’s earnings are skewed toward the second half of the financial year.