Toshiba, one of the biggest names in consumer electronics, has warned it is facing annual losses of more than £7bn and the future of the company is in doubt as a result of financial turmoil at its nuclear power plant construction business.
The Japanese company finally released third quarter results, after twice delaying publication while auditors attempted to quantify the scale of the problems at Toshiba’s US nuclear engineering subsidiary Westinghouse, which filed for bankruptcy last month.
Toshiba took the unusual decision to publish them on Tuesday without the approval of auditor PricewaterhouseCoopers Aarata. The company said PwC Aarata had been too uncertain about the financial impact of Westinghouse’s takeover of nuclear construction company CB&I Stone and Webster in 2015.
Westinghouse’s plight stems from a $6.1bn (£4.9bn) writedown because costs have overrun on the two plants CB&I is building in Georgia and South Carolina, the first new US nuclear power stations for decades.
The unaudited results showed Toshiba’s total losses widened by 53bn yen to 532bn yen (£3.9bn) in the nine months ending December 2016, adding that losses for the full year ending March could amount to more than 1tn yen (£7.3bn). It would be one of the biggest losses in Japanese corporate history.
“There are material events and conditions that raise substantial doubt about the company’s ability to continue as a going concern,” the company said in a statement.
Failure to file audited results fuelled speculation that the company could be forced out of the Tokyo Stock Exchange. Toshiba’s president, Satoshi Tsunakawa, called the auditor’s decision not to approve the figures “truly regrettable” and said he hoped the company would not be delisted.
Toshiba is attempting to strengthen its balance sheet by selling other assets, including its memory chip business.
The company’s escalating crisis also heightened fears about the future of Toshiba’s planned Moorside nuclear plant in Cumbria. Earlier this month it was forced to take full control of the venture behind the project, Nugen, after its previous partner, the French utility Engie, exercised the right to sell its 40% stake under an option triggered by Westinghouse’s bankruptcy filing.
Unite, Britain’s largest trade union, said it was fearful about what the latest developments at Toshiba would mean for the Moorside plant, and repeated its call on Greg Clark, the business and energy secretary, to intervene to safeguard the future of the project.
Kevin Coyne, Unite’s national officer for energy, said: “The latest news about the very poor financial health of Toshiba raises further concerns about its involvement in the construction of the Moorside nuclear power station in Cumbria.
“Unite renews its call to the business secretary, Greg Clark, to step in and pledge public investment to ensure that the project goes ahead on schedule, as Toshiba is in deep financial trouble and has a big question mark over its future.”
Coyne said the “lights could go out” in the future without a coherent, joined up energy policy, adding Moorside would be crucial.
“The importance of Moorside can’t be underestimated as it is expected to generate 20,000 highly skilled jobs during its construction and when it is up and running – and also supply 7% of the UK’s electricity needs from 2025,” he said.
A spokesperson for the Department for Business, Energy and Industrial Strategy said the government was talking to potential investors.
“The UK government is committed to new nuclear as an important part of our energy mix, having commissioned the first new nuclear power plant in a generation at Hinkley Point C,” the spokesperson said.
“The NuGen consortium has always planned to bring in other partners to deliver the project and we engage regularly with a range of developers and investors. The secretary of state visited South Korea last week for talks on future collaboration between our two countries, including on potential civil nuclear projects.”
In February, Tobisha said its chairman, Shigenori Shiga, was resigning to take “management responsibility” for the writedowns related to Westinghouse.
