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Toshiba’s profit down 75 percent due to weak demand

Toshiba’s second quarter profit declined by nearly 75 percent in electronics and several other businesses. The company’s poor results have increased uncertainty about the deal to buy it. The company said that its business has been affected by the weakness in the hard disk market and some other factors. It has slashed its profit forecast for the financial year ending March by nearly a quarter.

Toshiba reported operating profit of about 7.5 billion yen (about Rs 430 crore) for the July-September period. This is much lower than analysts’ estimates. Memory chip maker Kioxia Holdings, which owns nearly 40 percent of Toshiba’s stake, has increased its earnings this month compared to October. Production About 30 percent reduction has been reported. Smartphones and personal computers have become increasingly popular in many countries due to rising inflation and some other reasons. sales The reduction has had an impact on the chip market. Due to this, the results of chip makers may remain weak in the coming quarters.

Toshiba’s weak results could put investors looking to buy into it. Nikkei said a consortium led by private equity fund Japan Industrial Partners (JIP) has bid to buy Toshiba for about $15 billion. However, the position regarding funding from the banks for this is not clear. This raises questions about the success of this bid. Japan Investment Corp, a Japanese government-owned fund, is also preparing a proposal for Toshiba. For this, the fund is in talks to form a consortium with American private equity fund Bain Capital and another fund.

Earlier this year, the company had to stop operations at Oita’s chip manufacturing plant in southern Japan due to an earthquake. The plant manufactures semiconductors used in cars and industrial machinery. System LSI chips are made in this plant, about 60 percent of which is sold to car makers and industrial machinery firms. Apart from this, the company also manufactures LSI chips at another plant in northern Japan.

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