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Toshiba to consider quitting PC, TV biz

Jiji PressTOKYO (Jiji Press) — Toshiba Corp. will consider whether to terminate its personal computer and television business after it incurred a first-half group net loss for the first time in five years, an executive said Thursday.

The loss for April-September stood at ¥49,785 million, against a profit of ¥115,309 million a year earlier, Toshiba said, citing taxes booked in advance in connection with the planned sale of its prized flash memory unit, Toshiba Memory Corp.

Group operating profit, meanwhile, jumped 2.5-fold from a year before to ¥231,768 million, renewing its record high for the first time in 28 years, on the back of higher demand for flash memory chips for smartphones.

The chip unit earned nearly 90 percent of the operating profit. Proceeds from its sale are estimated at over one trillion yen.

Toshiba faces an urgent need to strengthen the profitability of other operations.

“We’ll conduct structural reform across the company, without exceptions,” Director and Corporate Executive Vice President Masayoshi Hirata told a press conference.

He said Toshiba will examine whether to pull the plug on its loss-making PC and TV operations, known for the Dynabook and Regza brands, respectively.

The company booked ¥60 billion in restructuring costs.

For the full year to March 2018, Toshiba projects a group net loss of ¥110 billion. But if the chip unit sale is completed by the fiscal-year end, the bottom line is expected to improve to a profit of ¥970 billion.

Toshiba’s negative net worth stood at ¥619,767 million at the end of September, even larger than ¥552,947 million six months before. It is projected to further expand to ¥750 billion at the end of next March unless the unit sale is done.

The company aims to avoid two straight years of negative net worth, a situation that would lead to its delisting from the Tokyo Stock Exchange, by completing the unit sale to a Japanese-U.S.-South Korean team led by U.S. private equity fund Bain Capital by the end of next March.

To finish the sale, Toshiba needs to clear hurdles including antitrust screenings in related countries and a legal battle with its existing U.S. flash memory business partner, Western Digital Corp.

Toshiba is also preparing for its possible failure to make it by the fiscal-year end. “We’re looking at various capital reinforcement measures in case the situation changes,” Hirata said.

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