Friday, March 7, 2003
Japanese electronics giant Toshiba unveiled a three-year plan to reverse its operating losses and slash debts by spinning off 20 percent of existing operations to focus on its digital audio-visual and semiconductor operations.
The plan seeks to achieve an operating profit of 270 billion yen (S$3.9 billion) by March 2006, compared with a 113.6 billion yen loss in the year to March 2002.
Toshiba also aims to slash its debt to equity ratio of 242 percent - or 1.76 trillion yen in debt - at the end of the last financial year to 150 percent.
The company will aim to spin off about 20 percent of existing operations, equivalent to 750 billion yen in revenue, Toshiba Corp president Tadashi Okamura said at a press conference.
Under the new business plan, Toshiba is to spin off its white goods operations and place the new firm and three other subsidiaries engaged in similar businesses under a new holding company.
In its statement, the company said home appliances were not seen as a core business.
The company said it would also consider drastic reforms, including a possible spin-off, for other businesses such as medical systems and solutions.
The restructuring costs would likely amount to some 20 billion yen a year over the next three years, Mr Okamura said.
"Now that we can see a clearer path for the earnings growth through implementation of the new plan, we have decided to pay three yen a share in final dividend (in the year to March 2003), although the business climate is still challenging," Mr Okamura said.
By: Docmemory
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