Toshiba Tec warns investors of extraordinary hit linked to Shenzhen restructuring.
Toshiba Tec Corporation has warned of a ¥4.02 billion ($27.5 million/ €25.5 million) extraordinary loss in the second quarter of its financial year, following restructuring at a Chinese subsidiary.
The Japanese office equipment maker said on Wednesday it will book the charge after ETRIA, its joint venture with Ricoh, decided to shrink the operations of Toshiba Tec Information Systems (Shenzhen), known as TESS. The cuts are part of efforts to consolidate manufacturing and streamline resources across the venture.
Toshiba Tec transferred TESS to ETRIA in July last year. Three months later, the company signed an agreement requiring it to shoulder part of redundancy costs if TESS downsized. ETRIA’s decision to reduce TESS’ scale triggered the obligation, leading to the one-off expense.
The company stressed that the costs are temporary and fully factored into its annual forecast, published in August. No further charges from the ETRIA restructuring are expected beyond the second quarter.
The disclosure comes as Japanese manufacturers seek leaner operations in China amid rising costs and shifting global demand.
