Toshiba may book write-down of several billion dollars
Toshiba said yesterday it may book a one-time loss of several billion dollars over a US subsidiary's acquisition of a nuclear service company. The Tokyo-based conglomerate said in a statement that costs linked to the 2015 transaction will possibly come to "several billion US dollars, resulting in a negative impact on Toshiba's financial results". The exact figure of the potential write-down is still being worked out, Toshiba President Satoshi Tsunakawa told reporters after the announcement. "The amount hasn't been determined," he said.
Tsunakawa apologized for "causing concern" and answered in the affirmative when asked if Toshiba is considering boosting capital. The announcement came after Toshiba shares closed nearly 12 percent lower on media reports about the potential loss earlier in the day.
Toshiba said the possible write-down was related to the valuation of the purchase by its US subsidiary Westinghouse Electric of the nuclear construction and services business of Chicago Bridge & Iron.
Westinghouse and Chicago Bridge & Iron have turned to an independent accountant to resolve a dispute over differences in asset valuations, Toshiba said earlier this year. "Westinghouse has found that the cost... will far surpass the original estimates" of $87 million, Toshiba said, adding that will result "in (a) far lower asset value than originally determined".
As a result, Westinghouse and Toshiba may both book one-time losses for this fiscal year ending March 2017, it said, adding it will announced a revised earnings forecast as soon as possible.
Toshiba is currently expecting an annual net profit of 145 billion yen ($1.24 billion), up 45 percent from an earlier estimate, on sales of 5.4 trillion yen. The announcement is the latest blow to Toshiba, a once-proud pillar of corporate Japan. It has been besieged by problems, most notably a profit-padding scandal in which bosses for years systematically pushed subordinates to cover up weak financial results. In an intensive overhaul, the company has been shedding businesses and announced the sale of its medical devices unit to camera and office equipment maker Canon. Investors had welcomed the makeover, with Toshiba shares climbing 77.3 percent this year through Monday. — AFP
TOKYO: Toshiba Corp President Satoshi Tsunakawa (right) bows at the end of a press conference at the company's headquarters in Tokyo yesterday. — AFP