March 24, 2017

Embattled Toshiba 'remains committed' to new nuclear plant in Cumbria

15 February 2017, 12:46 | Ted Wilson

Now they are getting set to post a group net loss of about $3.52 billion for the nine months through December

Now they are getting set to post a group net loss of about $3.52 billion for the nine months through December

Toshiba has also announced it is going to dramatically scale down its overseas nuclear projects, including the £2bn it is investing, through its 60 per cent stake in NuGen, to build the Moorside plant. Worse, the company's nuclear business has run up almost double that in losses.

Masayuki Kubota, chief strategist at Rakuten Securities, said that if the company continued to unload its most profitable businesses while keeping problem units, "it is impossible to have hope about Toshiba's future".

Toshiba is rumoured to have approached Korea Electric Power as a potential buyer for its stake in NuGen, according to the Nikkei business paper.

The challenging by-election was forced on Labour by the resignation of its popular local MP Jamie Reed, who has taken a job as the head of development and community relations at Sellagield, the nuclear fuel reprocessing plant in the heart of the constituency.

For the nine-months of fiscal 2016, the company projects a net loss of 499.9 billion yen including the impairment loss.

The earnings results came after a chaotic afternoon, which began when the company missed its own deadline for announcing earnings. "The market speculates that Toshiba will be releasing figures worse than what is being reported already".

During the past few decades, Toshiba has been wholly or partly involved in the construction of 20 nuclear reactors in Japan, none of which are now operating following the triple meltdown at Fukushima Daiichi in March 2011.

In its preliminary results, Toshiba said it anticipates a group net loss of 500 billion yen ($4.4 billion) for April-December of a year ago, including the 712.5 billion yen hit from its nuclear business.

"Uncertainty looms over how a Toshiba writedown related to its Westinghouse subsidiary may affect the fixed-price contract Scana signed to guarantee completion of its new Westinghouse nuclear units", Stacy Nemeroff, an analyst for Bloomberg Intelligence, wrote in a research note Tuesday.

Efficiency moves expected at CB&I Stone & Webster never played out, resulting in a huge overvaluation of the company's worth that led to the huge losses. Known for its pioneering innovations in notebook computers and the flash memory chips that are ubiquitous in today's devices, Toshiba has struggled in recent years with the decline of its consumer business.

SCE&G is the primary subsidiary of SCANA Corporation, which announced that it will discuss the situation during its February 16 earnings call and "will take into account the relevant information disclosed by Toshiba" on February 14.

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