Takata Corp. said Thursday it plans to book charges of ¥107.5 billion ($958 million) for the period from April to December due to the replacement of faulty air bags and a major U.S. fine.
The manufacturer said it will book an extraordinary loss of ¥96.93 billion after agreeing to pay $1 billion to U.S. regulators over its handling of deadly air bag ruptures, while logging another charge of ¥10.63 billion to deal with the ensuing recalls.
Takata is at the center of a global recall of defective air bags and the massive recall costs are putting the company under pressure from automakers to pursue court-mediated restructuring, according to industry sources.
The recall-related costs to be shouldered by Takata and the automakers are estimated to eclipse ¥1 trillion.
Takata said last November that it expected to return to the black for the first time in three years for the business year through March 31, but that possibility has receded, given the charges it now expects to book, analysts said.
Takata said it now projects a foreign-exchange-related gain of ¥4.07 billion in the nine months through December due to the yen's recent depreciation, and is "assessing" how the extraordinary losses and the currency-related gain will affect its earnings.
In January, Takata pleaded guilty to criminal wrongdoing and agreed to pay a $1 billion settlement, the U.S. Justice Department said.
That came after U.S. auto safety regulators in November 2015 fined Takata $200 million for providing inadequate and inaccurate information to regulators about the defect.
Concern that Takata's air bag inflators could rupture and spray metal parts at passengers prompted regulators to order the recall. The defective part has been blamed for at least 15 deaths globally.
Takata is scheduled to release its earnings report for the April-December period on Friday.