Toshiba sees largest-ever loss of 280 bil. yen in FY08+

TOKYO, Jan. 29 Kyodo - Toshiba Corp. said Thursday it expects its largest-ever group net and operating loss of 280 billion yen for the current business year through March due to plummeting flash memory prices and slowing consumption amid the worsening global economic downturn.

The projected first consolidated net and operating loss in seven years, since
fiscal 2001, compares with a net profit of 127.41 billion yen and an operating
profit of 238.10 billion yen logged the previous year.
To combat the heavy losses, Toshiba announced a major restructuring program
under which 4,500 temporary workers in its struggling semiconductor and liquid
crystal display businesses will be laid off when their contracts expire at the
end of March.
But Toshiba President Atsutoshi Nishida vowed to protect its full-time
employees by introducing a temporary leave system to share working hours, by
reducing overtime work, and by reassigning personnel to profit-making
businesses, while expanding pay cuts up to 50 percent for executive and senior
officials including himself.
''This kind of work-sharing is necessary at a time of a heavy slump in the
semiconductor business, a subsequent drop in the operating rate, and scaling
down of production,'' Nishida said at a press conference in Tokyo.
In its second revision of earnings projections for the whole of fiscal 2008,
Toshiba said it now expects group sales of 6.7 trillion yen, compared with its
earlier projection of 7.7 trillion yen and down 12.6 percent from 7.67 trillion
yen chalked up the previous year.
Toshiba, the world's No. 2 maker of NAND flash memories, has been struggling to
ride out a deep slump in the global chip industry caused mainly by a supply
glut and falling demand triggered by the spreading global recession.
''I imagine this severe business environment will continue into fiscal 2009,''
Nishida said.
Nishida said Toshiba will aim to cut fixed costs by 300 billion yen in fiscal
2009 by reorganizing chip-making facilities in Japan while shifting production
operations to and expanding them in foreign countries where costs are expected
to be lower.
Toshiba will also push back the construction start for a flash memory chip
factory in Yokkaichi, Mie Prefecture, from this spring to 2010 and delay the
construction start for a chip plant in Kitakami, Iwate Prefecture, for an
indefinite period.
Under its restructuring program, the company also aims to slash group-wide
capital spending for fiscal 2009 to 230 billion yen from 455 billion yen
projected for fiscal 2008.
In addition to the price erosion of flash memory chips widely used for digital
home appliances such as cellphones and digital cameras, Toshiba said sales of
other mainstay products like personal computers and white goods also declined
on flagging personal spending caused by the global recession.
For the first nine months of fiscal 2008, the Japanese electronics giant
incurred a group net loss of 159.60 billion yen, compared with a net profit of
126.16 billion yen during the same period a year earlier.
Based on U.S. accounting standards, Toshiba also logged a group operating loss
of 182.30 billion yen, compared with a profit of 124.58 billion yen earned
between April and December 2007, on sales of 4.98 trillion yen, down 10.5
percent.
''This dramatic deterioration was caused by the triple punch of general
negative factors like the economic downturn triggered by a credit squeeze, the
appreciation of the yen and the (unique) factor of a semiconductor slump,''
said Toshiba's Corporate Executive Vice President Fumio Muraoka.
Nishida added the company will aim to bring its semiconductor operations back
into profitability by the latter half of fiscal 2009 through March 2010.
The company said it is planning to forgo a dividend for the second half of
fiscal 2008. The fiscal 2008 dividend may thus be limited to 5 yen per share
paid for the first half. The previous year's dividend totaled 12 yen per share,
including 6 yen for the first half.
==Kyodo
2009-01-29 21:59:35