Toshiba net profit down 34% as it eyes Alstom's power grid unit

8th May 2014, Comments 0 comments

Toshiba said Thursday its full-year net profit fell about 34 percent with one-off costs weighing on its bottom line as the Japanese firm reportedly eyes French giant Alstom's power-grid business.

The fall in Toshiba's net earnings to 50.83 billion yen ($500 million) in the fiscal year to March was chiefly due to the cost of exiting an optical disc drive business jointly run with South Korea's Samsung. That was about half Toshiba's earlier net profit forecast.

However, operating profit jumped 47 percent to 290.76 billion yen while sales came in at 6.50 trillion yen, up 13.5 percent from a year earlier, the technology and engineering conglomerate said.

"Our company saw a boost in sales in all five business segments and, in particular, the electronic devices division saw a big rise," it said in a statement.

Toshiba is involved in a range of businesses from power generation and transmission systems and medical equipment to computer chips and laptops.

For the year to March next year, Toshiba said it expected a net profit of 120 billion yen on sales of 6.7 trillion yen.

Earlier Thursday, Japan's leading Nikkei business daily said Toshiba will offer to buy Alstom's power-grid business from General Electric, if the US firm completes a $17 billion bid for a chunk of the French conglomerate.

Alstom, which builds power stations and electricity generating equipment as well as the French TGV high-speed train, is mulling a bid from GE for its energy unit and a rival offer by German group Siemens.

The division includes fossil-fuel-fired power plants, renewable energy and power grid equipment.

The Nikkei said Toshiba would move once GE seals the deal, paying an estimated several hundred billion yen (several billion dollars) for the energy business.

The US firm is seen as having an edge over its German rival, the report said, and Toshiba already has a tie-up with GE in thermal power generation.

If completed, Toshiba would see its power-grid sales nearly triple from about 300 billion yen annually now, the Nikkei said.

Toshiba is betting that GE would agree to unload the grid business to ease its acquisition burden and focus on power generation systems, the Nikkei said.

A company spokesman said no decision had been made on the reported GE offer.

Toshiba shares rose 1.02 percent to 394 yen in Tokyo.

© 2014 AFP

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