Toshiba, westinghouse, scandal

Shareholders arrive at Toshiba’s extraordinary shareholders meeting in Chiba, Japan. Source: Reuters

Delayed Toshiba earnings report reveals $8.8b in losses

AFTER several delays, Toshiba Corp. has finally released an audited earnings report, which revealed the company’s losses are valued at JPY965.7 billion (US$8.8 billion) for the 2016-2017 financial year ending March this year, reported Bloomberg.

Though a startling number, it should be noted those losses are comparable to the initial estimates by independent analysts who predicted Toshiba would lose an average of JPY977.4 billion (US$8.9 billion). Toshiba’s own outlook was far more bleak, with their own financial officials reporting they expected to lose JPY1.01 trillion (US$9.2 billion).

Visitors look at a nuclear power plant station model by American company Westinghouse at the World Nuclear Exhibition 2014, the trade fair event for the global nuclear energy sector, in Le Bourget, near Paris. Source: Reuters

All in all, it appears  it’s good news for Toshiba, who finally has a qualified endorsement from PricewaterhouseCooper, which signed off on the report. It’s a sign the company has cleared a major hurdle, though it by no means signifies they’re out of the woods just yet.

The company still has to reckon with an impending legal fight with its American partner, Western Digital, as well as the not-insignificant task of stabilizing a company rocked by scandal and investor distrust.

Toshiba has not even been spared the scorn of their auditors, who criticized the company’s poor internal controls. In the years before, Toshiba has been caught in an accounting scandal which set off a series of poor opinions from analysts and investors alike. Since then, suspicions about the company’s opaque finances have resulted in slipping stock prices, a situation exacerbated by the bankruptcy of its Westinghouse nuclear business.

“The fact they have finally managed to file and got a qualified endorsement is good news,” Hideki Yasuda, an analyst at Ace Research Institute, said to Bloomberg.

“That’s not to say the risk of delisting is gone, but at least they’ve cleared the most immediate hurdle.”

The company is facing a possible delisting from the Tokyo Stock Exchange as a result of the manipulation of its account books. The matter is under investigation and if Toshiba fails to clean up its act and pull itself out of the red by next March, expulsion is almost a given.

SEE ALSO: Toshiba reportedly settles on Japan-led bidder for semiconductor business

Toshiba is now working on a sale of its beloved flash memory unit, an announcement which sparked anger from its investor base. The sale, which is estimated to raise JPY2.1 trillion (US$19 billion), is being contested by Western Digital, who is suing the Tokyo-based company to prevent the deal from going through without its agreement. At this point, a Japanese consortium of companies looks likely to be the winning bidder.

The company is also looking to list their energy-metering company, Landis+Gyr AG, which could earn them an additional JPY161.7 billion (US$1.8 billion) for about 60 percent of the company.