Nuclear write-down leaves Toshiba with $3.5-billion loss in third-quarter: Nikkei

Sat Feb 11, 2017 8:48pm EST
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TOKYO (Reuters) - Japanese conglomerate Toshiba Corp probably suffered a group net loss of about 400 billion yen ($3.52 billion) in the nine months through December, the Nikkei reported on Sunday.

The loss is largely due to a goodwill impairment of around 600 billion yen on a U.S. nuclear unit that came to light in late 2016.

During the year-earlier period, Toshiba lost a similarly significant 479.4 billion yen.

The company hopes to keep the amount it owes from exceeding the value of its assets for the full year through March by selling part of its chip operations and taking other measures.

Toshiba will announce earnings for the April-December period on Tuesday, along with a full-year outlook. The company is also expected to explain the cause of the losses, measures to avoid similar events and plans to rebuild its nuclear business.

The loss comes from the write-down of goodwill of CB&I Stone & Webster, a U.S.-based nuclear plant builder Toshiba acquired through U.S. subsidiary Westinghouse Electric in late 2015. Dwindling global demand for nuclear power and poor project

management have pushed up labor and materials costs at the company to levels far exceeding initial estimates.

In addition, it turns out that Toshiba overestimated the value of the company's projects at the time of acquisition.

As a result, Toshiba decided to write down the premium it paid for the company, the difference between the acquisition price and Stone & Webster's net assets, and book it as a group loss for Toshiba's nuclear operations.   Continued...

FILE PHOTO -  The logo of Toshiba is pictured on its flash memory factory, seen during a media tour in Yokkaichi, western Japan September 9, 2014.  REUTERS/Reiji Murai/File Photo