Toshiba says may book write-down of several billion dollars

FRENCH PRESS AGENCY - AFP
TOKYO
Published
Toshiba Corp. President Satoshi Tsunakawa bows the beginning of a press conference at the company’s headquarters in Tokyo, Tuesday.
Toshiba Corp. President Satoshi Tsunakawa bows the beginning of a press conference at the company’s headquarters in Tokyo, Tuesday.

Toshiba said Tuesday it may book a one-time loss of several billion dollars over a U.S. subsidiary's acquisition of a nuclear power service company. The Tokyo-based conglomerate said in a statement that costs linked to the 2015 transaction will possibly come to "several billion U.S. dollars, resulting in a negative impact on Toshiba's financial results."

The exact figure of the potential write-down, however, is "still subject to determination," it added. The announcement came after Toshiba shares closed nearly 12 percent lower on media reports about the potential loss earlier in the yesterday. Toshiba said the possible write-down was related to the valuation of the purchase by its U.S. subsidiary Westinghouse Electric of a U.S. nuclear service company. Westinghouse and seller 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 in March 2017, it said, adding it will announce 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.

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