Toshiba turns to profit in April-June quarter
Toshiba’s management has been in turmoil for the past few months, following years of discontent from activist investors. © Reuters
AKANE OKUTSU, Nikkei staff writer | Japan
TOKYO — Toshiba turned to profit in the April-June quarter for the first time in two years, as the company faces management shake-ups and governance questions from shareholders.
The Japanese industrial conglomerate generated an operating profit of 14.5 billion yen ($131.3 million) in the first quarter to end-June, up by 27 billion yen from the same period in 2020 during the pandemic. Revenue increased by 21% to 727.8 billion yen, the company announced on Thursday.
The company expects 3.25 trillion yen in revenue and 170 billion yen in operating profit in fiscal year ending March 2022.
With discontent from activist investors building up for years, Toshiba’s management has been in turmoil in the last few months. The first-quarter earnings cover the results under President and CEO Satoshi Tsunakawa, who returned as president to replace Nobuaki Kurumatani in April. The company is now tasked not only with searching for Tsunakawa’s successor, but also to find a new board chairman and other board members.
Kurumatani resigned after private equity company CVC Capital Partners expressed interest in a possible $20 billion buyout of Toshiba. The deal was shelved, raising questions from some shareholders about the company’s decision-making process.
In June, an independent investigation found that Toshiba colluded with the government to influence activist investors at last year’s annual general meeting. This led the company to remove two directors from the list of board candidates for this year’s AGM.
At the AGM held in the same month, the reappointment of Osamu Nagayama as board chairman and that of another director were rejected by shareholders, so that only nine out of the original 13 candidates were appointed. Tsunakawa became the interim board chairman.