Toshiba braces for losses
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 that costs linked to last year’s 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 said after the announcement.
Tsunakawa apologised for causing concern and answered in the affirmative when asked if Toshiba was considering boosting capital.
The announcement came after Toshiba shares closed nearly 12% 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 $87million (R1.21-billion), 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.
Toshiba is currently expecting an annual net profit of 145- billion yen (R17.2-billion), up 45% from an earlier estimate, on sales of 5.4 trillion yen (R64.21-billion).
Toshiba has been besieged by problems, most notably a profit-padding scandal where bosses for years systematically pushed subordinates to cover up weak financial results.
The company has shed businesses and announced the sale of its medical devices unit to camera and office equipment maker Canon.
In response, Toshiba shares climbed 77.3% this year through to Monday. — AFP