Toshiba Corp. may post a loss of more than ¥100 billion for the year through March in connection with its nuclear plant business in the United States, sources familiar with the matter said Tuesday.
The company, which is battling to overcome a massive window-dressing scandal, expects the amount of the full-year loss could grow, the sources said.
The loss is likely to be posted after a review of asset values in CB&I Stone & Webster Inc., a nuclear plant builder Toshiba bought in December 2015, the sources said.
At a news conference held Tuesday evening in Tokyo, Toshiba President Satoshi Tsunakawa admitted to a massive loss but didn’t provide an exact estimate.
“We sincerely apologize to all parties involved,” Tsunakawa said. “We have determined that the cost of building a nuclear power station in the United States would be larger than expected.”
The president also said Toshiba will consider measures to bolster its financial base.
In a statement released earlier in the day, Toshiba said it is considering booking an impairment loss stemming from a markdown in the value of the U.S. unit. The company held a board meeting later in the day to discuss the matter.
Toshiba has been in a dispute with Chicago Bridge & Iron Co. N.V., which sold CB&I Stone & Webster to the Japanese company, over the difference in their valuations of the unit’s assets and business.
The electronics maker has likely been in talks with its main banks to explain its financial situation and the company may request assistance, the sources said.
As of the end of September, Toshiba had shareholders’ equity of ¥363.2 billion.
The company posted a group net loss of ¥460 billion in the last fiscal year ended March as it undertook sweeping restructuring steps after revealing it had overstated profits for years.
But in the current earnings forecast, the company expects to return to profitability in the current fiscal year. Toshiba last month revised upward its group net profit forecast for this year to ¥145 billion from 100 billion, citing robust chip sales.
Toshiba has been focusing on nuclear energy operations as its core business but is struggling to win orders for new power plants both at home and abroad.
Some government officials have voiced the need to realign Japan’s nuclear industry.
The Nikkei business daily first reported the matter on its website. “Assuming the article to be accurate, we would expect Toshiba’s weak financial standing to be damaged further,” said Takeshi Tanaka, an analyst at Mizuho Securities Co.
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