Norio Sasaki, the new president of Toshiba Corp., said he aims to boost the company’s capital adequacy ratio to 30 percent during his stint as he strives to return the struggling tech giant to profitability.
“My No. 1 biggest mission and responsibility is to ride out this crisis and achieve recovery of our businesses so that we can make a fresh start for profitability and sustainable growth,” Sasaki, 60, said in a recent interview with media.
Formerly vice president, Sasaki officially took the helm of the electronics giant Wednesday. Toshiba fell deeply into the red for the first time in seven years in business 2008 to March and logged its biggest-ever group net loss of more than ¥340 billion.
The company is aiming to return to the black with an operating profit of ¥100 billion in the current business year.
Sasaki said he will focus on completing Toshiba’s restructuring program to cut ¥300 billion in fixed costs and establish a leaner firm that can adapt more flexibly to market changes.
“I’m going to move ahead with a shakeup that will turn Toshiba into a top-level comprehensive electronics maker with global competitiveness,” he said.
Toshiba’s capital adequacy ratio, including minority equity, plunged to 13.9 percent at the end of March but now stands at around 19 percent after the company raised about ¥500 billion in capital through public stock and subordinated bond offerings.
“With the size of our company and the operations we have, it’s not strange to aim for about 30 percent,” Sasaki said.
Toshiba, the world’s No. 2 maker of NAND flash memories, saw profits wiped out by plummeting memory prices caused by a supply glut and weakening demand due to the global recession.
Back in January, Sasaki’s predecessor, Atsutoshi Nishida, hinted at an industrywide realignment with an eye on spinning off the system large-scale integrated circuit operations of its semiconductor division.
Analysts are closely watching Toshiba’s next move after chip makers Renesas Technology Corp. and NEC Electronics Corp. got a head start by announcing plans to integrate their operations by next April.
But Sasaki said, “We have no plans to spin off until proper conditions have been fully met.”
He said Toshiba plans to rebuild the system LSI operations by focusing resources on profitable products, emphasizing that a spinoff is only a means and not an objective.
The new chief executive is also a veteran of the nuclear energy and power generation businesses who orchestrated the acquisition of Westinghouse Electric Co. of the United States in 2006.
The nuclear power business “generates constant profits so its share will naturally increase when the environment is tough,” Sasaki said.
While profits are already growing, sales from Westinghouse will make an even bigger contribution to company earnings after 2012 or 2013, he added. Toshiba has won orders for 12 nuclear power plants in the U.S. and China.
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