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Toshiba widens full-year loss forecast in wake of huge accounting scandal

Xinhua, February 4, 2016 Adjust font size:

Toshiba Corp. downgraded its earnings outlook for fiscal year 2015 on Thursday as the multinational businesses conglomerate has seen below par sales from its consumer electronics sector and a monumental accounting scandal.

The scandal has led to broad restructuring initiatives involving the firm slashing jobs and dumping businesses and assets to counter losses.

Toshiba said for the year through March 31, it now expects a group net loss of 710 billion yen (6.02 billion U.S. dollars), larger than initial projections of a 550-billion yen loss.

The Tokyo-headquartered firm also said it is now projecting a consolidated operating loss of 430 billion yen, up from 340 billion yen, on revenue of 6.2 trillion yen, unchanged from the previous estimate.

For the April-December period, a group net loss of 479.44 billion yen was logged, compared to a profit of 107.22 billion yen made a year earlier, Toshiba said.

In the nine-month period it had posted a group operating loss of 229.51 billion yen on sales of 4.42 trillion yen, down 6.4 percent compared to a year earlier.

When it came to light that Toshiba's management, including executives, knew that accountants had been padding their books for around seven years, the industrial conglomerate was forced to oust its executives and issue a swathe of write-downs, with President Masashi Muromachi also announcing wholesale restructuring plans in an effort to reboot the ailing company and recoup losses.

These plans included slashing its workforce, offloading its medical unit and rejigging its loss-making PC and TV businesses.

Toshiba said on Thursday that it would be offering early retirement packages or reassign around 90 of its healthcare workers and 150 employees working in its hard-drive sector. The firm also said that there will be broad scale pay cuts among its executives from this month.

Its lifestyle business has already seen a heavy reduction of employees and further cuts are expected in its corporate division, possibly as many as 1,000 staff, while its chip business is likely to see around 2,800 jobs slashed henceforth.

Muromachi, who has approved credit lines from banks to the tune of 1 trillion yen, has said that public fundraising will be halted for at least two years. Enditem