In what was a much-anticipated move to address lingering doubts over its book-keeping, Japan's Toshiba Corp said on Tuesday that it booked an impairment charge of 260 billion yen ($2.34 billion/1.5 billion pounds) for the past fiscal year on the nuclear business.
As it booked a pretax profit of 590 billion yen from the sale of a medical equipment division to Canon Inc, Toshiba raised its earnings estimates for the year ended in March.
It now forecasts a group net loss of 470 billion yen, smaller than a 710 billion yen loss estimated earlier.
Earlier there were reports that were making the rounds of the market earlier.
Even after the company revealed accounting irregularities worth $1.3 billion, the need for a writedown of Westinghouse had been suspected by investors in the light of the deterioration in the nuclear business' fundamentals. But the electronics conglomerate has refrained from taking the step so far.
The announcement made on Tuesday finally indicates that the Japanese electronics company is finally cleaning up its books as it goes about restructuring the laptops-to-nuclear conglomerate.
There were also reports about the resignation of Chief Executive Masashi Muromachi in reference to the accounting scandal in a company committee met recently. It is being seen as another sign that the company was preparing to draw a line under the accounting scandal.
Muromachi had said that he wanted to step down after ensuring Toshiba was on track to recovery.
The Westinghouse writedown come on top of a 710 billion yen net loss forecast earlier by Toshiba for the same year.
There have been concerns expressed by Toshiba investors for some time now about the overstated value of Tpshiba’s nuclear business which is worth around 350 billion yen. In the aftermath of the 2011 Fukushima disaster, nuclear power has become less popular. Toshiba had made the investment in Westinghouse in 2006.
Earlier last month the company conducted a stress test to see whether it would need to write down its nuclear business. The Asahi newspaper had reported earlier that Toshiba was considering a 200 billion yen writedown for Westinghouse. The company has however declined to comment on the results of the stress test that it had conducted.
Market experts are of the opinion a profit of about 590 billion yen from the sale of a medical equipment unit to Canon Inc would be able to offset the potential impact of the writedown on earnings.
Muromachi was the brain behind the medical unit sale and was considered ot be a part of his drastic business overhaul. Muromachi had taken over Toshiba last July after his predecessor and a slew of other top executives resigned for their roles in the country's biggest accounting scandal in years.
The Sankei newspaper had reported earlier, without citing sources, that Muromachi has expressed a desire to step down as early as June.
His successor is expected to be one of Toshiba's three senior executive vice presidents, with Yasuo Naruke, who heads the core chip business, the likely front-runner, the newspaper said.
(Source:www.reuters.com)
As it booked a pretax profit of 590 billion yen from the sale of a medical equipment division to Canon Inc, Toshiba raised its earnings estimates for the year ended in March.
It now forecasts a group net loss of 470 billion yen, smaller than a 710 billion yen loss estimated earlier.
Earlier there were reports that were making the rounds of the market earlier.
Even after the company revealed accounting irregularities worth $1.3 billion, the need for a writedown of Westinghouse had been suspected by investors in the light of the deterioration in the nuclear business' fundamentals. But the electronics conglomerate has refrained from taking the step so far.
The announcement made on Tuesday finally indicates that the Japanese electronics company is finally cleaning up its books as it goes about restructuring the laptops-to-nuclear conglomerate.
There were also reports about the resignation of Chief Executive Masashi Muromachi in reference to the accounting scandal in a company committee met recently. It is being seen as another sign that the company was preparing to draw a line under the accounting scandal.
Muromachi had said that he wanted to step down after ensuring Toshiba was on track to recovery.
The Westinghouse writedown come on top of a 710 billion yen net loss forecast earlier by Toshiba for the same year.
There have been concerns expressed by Toshiba investors for some time now about the overstated value of Tpshiba’s nuclear business which is worth around 350 billion yen. In the aftermath of the 2011 Fukushima disaster, nuclear power has become less popular. Toshiba had made the investment in Westinghouse in 2006.
Earlier last month the company conducted a stress test to see whether it would need to write down its nuclear business. The Asahi newspaper had reported earlier that Toshiba was considering a 200 billion yen writedown for Westinghouse. The company has however declined to comment on the results of the stress test that it had conducted.
Market experts are of the opinion a profit of about 590 billion yen from the sale of a medical equipment unit to Canon Inc would be able to offset the potential impact of the writedown on earnings.
Muromachi was the brain behind the medical unit sale and was considered ot be a part of his drastic business overhaul. Muromachi had taken over Toshiba last July after his predecessor and a slew of other top executives resigned for their roles in the country's biggest accounting scandal in years.
The Sankei newspaper had reported earlier, without citing sources, that Muromachi has expressed a desire to step down as early as June.
His successor is expected to be one of Toshiba's three senior executive vice presidents, with Yasuo Naruke, who heads the core chip business, the likely front-runner, the newspaper said.
(Source:www.reuters.com)