Toshiba reports $6.3bn loss in nuclear business, chairman to step down

Toshiba’s Nuclear Reactor Mess

The company issued a forecast that said it was on track to report a net loss of 390 billion yen (S$4.8 billion) in the current fiscal year to March, with losses in its atomic division topping 700 billion yen.

The Japanese giant said in a provisional results presentation to investors Tuesday that "Toshiba will consider participating in the project without taking on any risk from carrying out actual construction work".

The chairman of Toshiba has resigned following the release of figures showing a projected $6.3bn loss from the company's nuclear business - a loss that may continue to grow and threaten its other businesses.

It is extraordinary for a major company like Toshiba, which is regarded as one of Japan's representative firms, to announce a delay just before a scheduled announcement. The charge will result in a provisional 500 billion yen loss for the nine months through December 31, the company said in a statement Tuesday.

Toshiba, however, had warned investors last month that it would announce goodwill impairment associated with the nuclear construction projects in the United States, and its February 14 announcements said the figures contained in it are not final and fully audited numbers will be issued March 14, after Japanese authorities allowed the company more time to file.

Toshiba shares closed down 8% for the day and have nearly halved in value since news of the problems first emerged.

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"The questions surrounding Toshiba are so numerous, where do you even begin", said Masahiko Ishino, an analyst at Tokai Tokyo Securities.

The company said it will reorganize its nuclear business to be directly under Tsunakawa for stricter monitoring.

The Japanese company Toshiba may have reached the end of the road.

The delay on a full update comes as it investigates the amount its Westinghouse subsidiary paid for U.S. construction and nuclear plant specialist CB&I Stone & Webster in 2015. Toshiba owns 60% of the firm NuGen, which was to construct a new generating station at Moorside in Cumbria.

Construction of the new reactors is expected to create thousands of jobs over the next decade, with many contracts expected to go to United Kingdom firms.

Then managers at the firm's United States subsidiary Westinghouse said that management was exerting "inappropriate pressure" regarding a business acquisition. The heavy net loss will be another blow to the company that reported a group net loss of ¥479.4 billion a year earlier.

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