TOKYO -- Toshiba's core businesses have stabilized. Consolidated operating profit for the half-year ending September reached about 50 billion yen, or $460 million, roughly seven times that of the same period last year, Nikkei has learned.
In a wide range of sectors, including its mainstay infrastructure and energy units, profitability improved and costs were cut.
Meanwhile, due to the struggles at its semiconductor memory affiliate, in which Toshiba has a 40% stake, and losses related to the U.S. liquefied natural gas business, net income looks to have landed in negative territory.
Operating profit will mark a three-year high, exceeding the average market forecast of 42.6 billion yen. Toshiba has shifted to a "profit-first" management, selling its PC business to Sharp in 2018 as part of that strategy. So while sales for the half dropped 4% to 1.7 trillion yen, the operating profit-to-sales ratio improved to 3% from 0.4%.
The engines of growth in the half were the infrastructure sector, which handles water, sewage and railway systems, and the energy sector, which offers power generation facilities.
The head office took charge of managing profitability at each individual project, trimming unprofitable projects and preventing construction delays. The reduction of staff in the energy sector also contributed.
After suffering huge losses in 2016 at its U.S. nuclear power plant business and spinning off its memory business in 2018, Toshiba has been restructuring its entire corporate structure. All six major divisions appear to have been in the black in the April-September half, up from three divisions in the same period a year earlier.
The building sector, which consists of the elevators, air conditioners, and lighting, is receiving more orders from office buildings and hotels in Tokyo and Osaka, due to the increase in development projects as well as the increase in visitors to Japan. Renewal projects for buildings built during the bubble economy are also increasing.
However, semiconductor memory affiliate Kioxia -- formerly Toshiba Memory -- looks to have performed poorly.
The company also recorded a loss of about 90 billion yen in the April-June quarter related to the sale of its U.S. liquefied natural gas business.
The financial results for the April-September period will be announced on Wednesday. Toshiba is expected to keep its operating-profit outlook for the full year ending March 2020 at 140 billion yen, which is 3.9 times the previous year.