Toshiba 1H Profit Jumps on Strong Memory Chip Demand

Toshiba's half-year operating profits have more than doubled, but the increase was driven by strong sales at the memory chip business that it has agreed to sell.

Operating profits at the Japanese conglomerate rose to 231.8bn yen ($2bn; £1.55bn).

Toshiba maintained its operating profit forecast for the year ending March at 430 billion yen which is lower than the 480 billion yen average of 12 analyst estimates. After seven months of negotiations, lawsuits, twists and turns, Toshiba bosses finally penned an $18 billion deal for its chip unit, paving the way for a consortium led by Bain Capital and Apple to take over its memory unit. Toshiba also said it would raise its capital investment in the chip business for this financial year to 600 billion from a previous plan of 400 billion yen, mainly to speed up the installation of a memory chip production line at Yokkaichi.

The chip unit brought in around a quarter of Toshiba's total annual revenue and is the crown jewel in a vast range of businesses ranging from home appliances to nuclear reactors.

However, Toshiba agreed to sell the unit for $18bn in September to cover losses at its USA nuclear business.

In its earnings statement, Toshiba also continued to warn the market about its "ability to continue as a going concern", following the disastrous acquisition of USA nuclear energy firm Westinghouse, which racked up billions of dollars in losses before being placed in bankruptcy protection.

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