Toshiba profits jump to 1.9T yen on Kioxia gains

Toshiba said on May 15 that net income for the year ended March 31 rose to 1.967 trillion yen from 279.0 billion yen a year earlier, as gains tied to its Kioxia stake lifted the bottom line. The company said operating income rose about 50% year-on-year and return on sales reached a record 8.1%. Toshiba attributed the jump in net income to solid performance in its core businesses and “profit from the sales and valuation of shares of Kioxia, etc.” The result matters because Toshiba is now a privately held company after its shares were delisted in December 2023, making its periodic disclosures one of the few public windows into how its restructuring is progressing. Toshiba’s investor relations site says the company was delisted from the Tokyo Stock Exchange and Nagoya Stock Exchange on December 20, 2023, and continues to post business results after FY2023 Q3. (global.toshiba) ### How much of Toshiba’s profit came from Kioxia-related gains? Toshiba did not break out the exact yen amount of the Kioxia-related gain in the summary pages of its FY2025 results, but it said directly that net income rose to 1.967 trillion yen on “profit from the sales and valuation of shares of Kioxia, etc.” Koji Ikeya, Toshiba’s corporate senior executive vice president, said net income was “almost seven times higher than in the previous year” on those gains and stronger core operations. (global.toshiba) A year earlier, Toshiba had credited a much smaller rise in net income to “an increase in equity earnings from affiliates due to Kioxia’s improved performance.” In FY2024, net income was 279.0 billion yen. The shift from affiliate earnings in FY2024 to sales and valuation gains in FY2025 shows how sharply the accounting impact from Kioxia changed over the past year. (global.toshiba) ### Why did Kioxia’s value move so much? Kioxia said on May 15 that operating profit for the year ended March rose 92.7% to 870.4 billion yen, helped by demand tied to artificial intelligence. Reuters reported the memory-chip maker forecast operating profit of 1.3 trillion yen for the April-June quarter and said it was preparing to list American depositary shares in the United States. (global.toshiba) Kioxia’s investor relations page showed its Tokyo-listed shares closed at 44,450 yen on May 15, down 8.27% on the day. Market data compiled by Stock Analysis put Kioxia’s market capitalization at about 26.46 trillion yen as of May 15, after a surge of more than 2,400% over the past year. Reuters said the stock had more than quadrupled year-to-date and had grown large enough in market value to surpass Sony and Fast Retailing. (streetinsider.com) ### What does this say about Toshiba’s core business? Toshiba said operating income stayed strong through the fourth quarter, with contributions from energy businesses including transmission and distribution, the hard-disk-drive business, infrastructure operations including defense, railways and social systems, and semiconductor manufacturing equipment. The company said U.S. tariffs still affected retail and printing, though price reviews and structural reforms reduced the impact. (kioxia-holdings.com) Koji Ikeya said Toshiba had made “steady” progress in strengthening profitability and controlling fixed costs. The company said it aims to raise return on sales to 10% in FY2026. ### Why are investors focused on the Kioxia link? Kioxia was carved out of Toshiba and later acquired in 2018 by a Bain Capital-led consortium for about $18 billion, according to Reuters. (global.toshiba) Reuters also reported that Kioxia listed in Tokyo in late 2024 and that Toshiba retained a stake after the carve-out. That history means changes in Kioxia’s valuation can still flow through Toshiba’s reported earnings. Toshiba’s own FY2024 and FY2025 disclosures show that Kioxia-related items affected net income in both years, first through affiliate earnings and then through sales and valuation gains. ### What comes next for both companies? (morningstar.com) Kioxia said its FY2025 financial results were scheduled for May 15 at 3:30 p.m. Japan time, and Reuters reported the company is preparing a U.S. ADR listing to expand its investor base. Toshiba, for its part, said it is targeting a 10% return on sales in FY2026 after posting FY2025 return on sales of 8.1%. (kioxia-holdings.com) (global.toshiba)