Toshiba Corp has said that its annual operating profit will increase four-fold to hit estimates previously predicted by economists.
According to the firm, the new forecast has been helped by a major restructuring effort that took place in 2018. At the same time, the company has initiated plans that could see it offload its U.S. LNG business, which it has identified as a potential money spinner.
The Japanese conglomerate estimated a profit of 35.4 billion yen last while this year to March 2020 it estimated the expected profit to be 140 billion yen. Toshiba, on the other hand, estimated a similar amount for its plan running for five years.
After announcing its five-year estimate in November, the firm’s price per share increased. However, due to the fears the Sino- U.S. trade war is likely to bring, it has been experiencing losses of about 15%.
By Monday afternoon, the stock was down by 3.5% but it recovered immediately the announcement was released in the early hours of the afternoon.
Among the changes the firm did last year include dissolving its nuclear power unit in Britain as well as the sale of its laptop and TV set business. With the changes, the firm is optimistic about continuous growth.
The firm’s U.S nuclear power unit Westinghouse caused the sale of Toshiba’s memory chip unit leaving it with low-margin social infrastructure businesses.
The U.S. liquefied natural gas (LNG) threatens to drag Toshiba’s progress since it’s under the agreement that demands it pays a processing fee for LNG for a period of more than 20 years from Freeport LNG. This is irrespective of if it will find interested buyers under the current rates.
There have been negotiations between Toshiba and ENN Ecological Holdings Co Ltd to receive $800 million from Toshiba to adopt the business but the talks backfired after the energy company withdrew.
It is reported that the Chinese based company pulled out due to the acute fall of LNG prices. Toshiba is now faced by the ordeal of finding other potential suitors.
Toshiba is also working on finding new ways to increase the performance of lackluster shares from activist shareholders who were active participants in the 600 billion yen issuance of shares in 2017.