TOKYO - Japan's Toshiba Corp posted its highest quarterly profit in two years on Wednesday and said it will buy out three of its listed subsidiaries as the industrial conglomerate moves on from accounting scandals and a management crisis.
Toshiba reported a much stronger-than-expected operating profit of 44.23 billion yen ($405.41 million) for the second quarter ended September, up from 6.25 billion yen a year prior, as it cut costs and reined in low-margin infrastructure projects.
That compared with a 25.97 billion yen average of 4 analyst estimates compiled by Refinitiv.
Toshiba maintained its profit forecast for the year ending March at 140 billion yen, versus 35.4 billion yen a year earlier, in line with the target the company set in its five-year plan.
The company also said it would launch tender offers for plant engineering firm Toshiba Plant Systems & Services, marine electrical systems maker Nishishiba Electric, chip-making equipment maker NuFlare Technology to convert them into wholly owned units.
The move comes as some activist shareholders have pushed for more action to overhaul its sprawling asset portfolio.
The Japanese government has also pointed out potential conflicts of interest between publicly traded parent companies and their listed subsidiaries and set corporate governance guidelines for those companies.
Toshiba has shifted its focus to profits from scale since massive accounting scandals that eventually led to the bankruptcy of U.S. nuclear power unit Westinghouse and the sale of its prized memory chip unit.
It has also overhauled its board to hike the number of external directors and include non-Japanese directors for the first time in 80 years, bowing to pressure from activist investors.
Its five-year plan aims for 8-10% operating profit margin for the year ending in March 2024 by focusing on energy, social infrastructure and service businesses.
($1 = 109.1000 yen)
(Reporting by Makiko Yamazaki; Editing by Christian Schmollinger)