Toshiba’s au­dited re­sults fi­nally signed off

Delist­ing still a pos­si­bil­ity from West­ing­house de­ba­cle

The Star Early Edition - - INTERNATIONAL - Yuri Kageyama

AU­DI­TORS signed off, be­lat­edly, on Toshiba’s earn­ings yes­ter­day, mean­ing the embattled Ja­panese elec­tron­ics and nu­clear com­pany will likely avert delist­ing, for now. But the au­di­tors, Price­Wa­ter­house­Coop­ers Aarata, cau­tioned about re­main­ing risks in a sep­a­rate state­ment.

The ap­proval had not come on sched­ule, be­cause of con­cerns about Toshiba’s money-los­ing nu­clear busi­ness in the US.

Toshiba’s US nu­clear unit, West­ing­house Elec­tric, filed for bank­ruptcy pro­tec­tion in March.

Re­ac­tors that West­ing­house was build­ing there were be­hind sched­ule, partly be­cause of beefed-up safety reg­u­la­tions fol­low­ing the 2011 Fukushima nu­clear dis­as­ter.

West­ing­house’s re­ac­tor projects in South Carolina were aban­doned ear­lier this month af­ter the tow­er­ing costs were weighed.

Toshiba is still mired in le­gal wran­gling with joint ven­ture part­ner Western Digital of the US, which is op­pos­ing Toshiba’s at­tempt to sell its com­puter mem­ory chip busi­ness to gain the cash it needs to sur­vive, and has taken le­gal ac­tion.

Yes­ter­day was the dead­line for the au­di­tors’ ap­proval. It had re­leased pre­lim­i­nary earn­ings ear­lier, with­out the ap­proval, to stave off delist­ing, though the com­pany was later moved to the Tokyo Stock Ex­change’s sec­ond sec­tion from its first sec­tion.

“Our earn­ings have now been nor­malised,” Toshiba Pres­i­dent Satoshi Tsunakawa said.

He re­it­er­ated that the com­pany was work­ing hard to re­vive it­self and re­gain value for share­hold­ers. He said no ad­di­tional losses were ex­pected re­lated to its US nu­clear busi­ness, af­ter the bank­ruptcy fil­ing and other set­tle­ments it has reached there.

He said Toshiba was still in talks with var­i­ous part­ners on the mem­ory chip sales, while de­clin­ing to com­ment in de­tail on why the agree­ment was be­ing de­layed.

He ac­knowl­edged that ma­jor ob­sta­cles re­mained, but stressed that he was de­ter­mined to go through with a sale.

Yes­ter­day’s au­di­tors’ ap­proval came af­ter a seven-month in­ves­ti­ga­tion into the is­sues raised by the au­di­tors, cen­tred on whether Toshiba had known in ad­vance the sub­se­quent losses that emerged re­lated to West­ing­house’s ac­qui­si­tion of CB&I Stone & Web­ster, a nu­clear con­struc­tion and ser­vices busi­ness.

Tsunakawa said he stood be­hind the de­ci­sion, al­though he ac­knowl­edged more due dili­gence might have been needed and the com­pany in­tended to beef up its risk man­age­ment.

The in­ves­ti­ga­tion in­cluded wide­spread in­ter­views and check­ing into e-mails, ac­cord­ing to Toshiba.

Toshiba re­ported a ¥965.7 bil­lion (R118bn) loss for the fis­cal year to March yes­ter­day, worse than the ¥460bn loss racked up the pre­vi­ous fis­cal year, and sim­i­lar to what it had re­ported be­fore.

It had ear­lier warned that such losses might bal­loon to nearly ¥1 tril­lion, and had given sim­i­lar fig­ures for the earn­ings.

Toshiba also re­ported first quar­ter earn­ings yes­ter­day, a re­turn to profit April-June at ¥50bn af­ter West­ing­house was re­moved from Toshiba’s books.

Toshiba – whose sprawl­ing busi­ness in­cluded every­thing from TV sets to high-speed trains – still faces the daunt­ing re­spon­si­bil­ity of keep­ing un­der con­trol and de­com­mis­sion­ing the Fukushima Dai­ichi nu­clear plant.

Three re­ac­tors there suf­fered melt­downs af­ter a mas­sive earth­quake and tsunami in north­east­ern Ja­pan in 2011.

Toshiba said, for the quar­ter to March, it marked solid profit in its mem­ory chip and en­ergy busi­nesses.

But if a sale goes through, the rev­enue and profit from the chip busi­ness will be retroac­tively de­ducted from its books for the fis­cal year. – AP


Satoshi Tsunakawa, pres­i­dent and chief ex­ec­u­tive of Toshiba, re­it­er­ated that the com­pany was work­ing hard to re­vive it­self and re­gain value for share­hold­ers at the pre­sen­ta­tion of Toshiba’s fi­nan­cials in Tokyo yes­ter­day.

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