Toshiba: an inconvenient truth

Toshiba has apologised for the inconvenience caused: its dividend has been suspended. There is worse, too. On Friday, the company said it would extend an inquiry begun in April into cost accounting at some of its infrastructure projects. Earnings before 2013 may have to be restated.

This is a blow to a company still adjusting to life after leaving the mobile phone and TV businesses. Sales have risen just 2 per cent a year on average over the past decade. With five divisions left, Toshiba still sprawls. Its products range from nuclear power systems to lifts to white goods.

It has interesting businesses, notably memory chips. Operating profit for the semiconductor segment has grown more than 17-fold since 2005. Yet the group's operating margins of nearly 25 per cent are dragged down by other parts of the company - several of which are persistently lossmaking.

Toshiba needs to streamline, lest the inconvenience persists far longer.

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