Toshiba Announces Concerns On Future and Releases Long-Awaited December Earnings Report
Toshiba Corp. recently announced it had doubts that it could continue to operate, mentioning the significant losses the company is suffering from due to its U.S. nuclear subsidiary filing for bankruptcy last month.
The company aired its concerns and released its December quarter earnings, which were previously delayed two times due to auditing. In the report, Toshiba said it would be hit with a net loss of 1.01 trillion Yen ($9.1 billion) for the fiscal year, which ended on March 31, 2017.
The company’s loss is the result of loan guarantees and various obligations that link back to the nuclear reactor projects its subsidiary U.S.-based Westinghouse Electric Co. There have been some major cost overruns associated with the projects.
Westinghouse filed for Chapter 11 bankruptcy protection from its creditors. When it did this, Toshiba had to remove it from its balance sheet.
Toshiba said there is a major uncertainty about the company’s ability to remain as it’s going. The report said the company hopes to resolve things and eliminate the concern, and it’s doing this by selling assets such as its semiconductor unit.
According to Toshiba, the company’s auditors had no official say in the most recent results. They were concerned about the previous accounting of Westinghouse and if it was properly done.
While getting auditors’ approval for earnings filing is customary, it’s not a mandatory procedure in Japan. According to a spokeswoman for the Tokyo Stock Exchange, the bourse would investigate why auditors decided not to sign off on the company’s books.
The exchange had granted Toshiba two extensions for its ninth month results. It placed the company on a watch list and has continually been looking at its governance after the 2015 accounting scandal. The review could cause the company to be delisted, but this is something the exchange would give careful consideration to especially with a company like Toshiba and its size.
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