Toshiba sales improve in first quarter

Japanese technology giant Toshiba has met the deadline to report its long-awaited earning results.

Auditor Pricewaterhouse Coopers Aarata is reported in The Japan Times as having given a “qualified opinion” on the results, which means that it broadly endorses them.

The firm saw group nets sales increase by ¥86.4 billion (£611 million) to ¥1.1 trillion in the first quarter – April to June – of the fiscal year 2017.

Consolidated operating income increased by 80.4bn yen to 96.7bn yen, which was significantly higher than the same period a year ago, mainly driven by a 35 per cent growth in return on sales (ROS) in its memory business due to stable prices.

Net income loss from continuing operations improved by ¥81.2bn to ¥85.1bn.

Toshiba attributed the growth to solid growth in the US economy, a recovery on investments in infrastructure and increased exports in China, and improving consumer spending patterns in Japan.

The euro-zone economy saw moderate growth, it said, while growth in the UK slowed.

Although Toshiba said in its results statement that it was aiming to improve its financial condition by executing a business plan to “focus on the social infrastructure business”, it there was still “substantial doubt” over its ability to “continue as a going concern exists as of the filing date”.

Toshiba has suffered ongoing losses in its US-based Westinghouse Electric Company. The company is also required to meet certain financial criteria in order to renew its Special Construction Business Licence, which expires in December 2017. It said that if it were unable to secure the licence, this would have an “extremely negative impact”.

The firm has also suffered setbacks in its bid to sell off its memory business, with Western Digital seeking to block the sale back in June this year, due to an arbitration clause in its joint manufacturing venture contract terms and conditions with Toshiba. This gives WD the right to agree or disagree any sale of Toshiba’s joint venture interests.

However, Toshiba said it hoped to sell the business by the end of March 2018, after necessary procedures such as the final agreement with the potential candidate and screening under competition law.