Sign in / Join
1394

UK nuclear power project in jeopardy as Toshiba warns it could go out of business

Toshiba has warned it is at risk of total collapse as it revealed soaring losses in an unaudited financial update.

The Japanese conglomerate’s net loss has grown by 53.1 billion Yen (£386 million) to 532.5 billion Yen (£3.9 billion) for the nine months ending in December last year.

Toshiba’s troubles could have a direct impact in the UK as it was announced last week that the company is to take over a firm planning to build a new nuclear power station on these shores.

Toshiba reported a pre-tax loss of 597bn yen in the nine months to December 31

It will buy French utility company Engie’s 40 per cent stake in NuGen, which is behind plans for the new power plant at Moorside, near Sellafield in Cumbria.

Kevin Coyne, national officer at Unite the union, 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.’

‘This follows hard on the heels of the Toshiba-owned Westinghouse Electric Company, due to supply the three AP1000 reactors for Moorside, applying for Chapter 11 bankruptcy protection in the US.’

It also forecast that its annual losses could accumulate to more than one trillion Yen for last year, which would be one of the largest losses in Japanese corporate history.

Toshiba’s financial status raises further concerns about its involvement in the construction of the UK’s Moorside nuclear power station

In a statement alongside its unaudited figures, Toshiba said: ‘There are material events and conditions that raise substantial doubt about the company’s ability to continue as a going concern’.

The electronics giant’s failure to publish audited accounts for the third quarter, October and December, comes after its US nuclear engineering firm Westinghouse filed for Chapter 11 bankruptcy protection in March.

Auditor PricewaterhouseCoopers Aarata has been unable to sign off the figures because of uncertainties over Westinghouse’s takeover of nuclear construction company CB&I Stone and Webster in 2015.

Failure to file audited accounts by today is fuelling speculation the company could be kicked off the Tokyo Stock Exchange.

Apologies: President Satoshi Tsunakawa has acknowledged problems facing Toshiba

President Satoshi Tsunakawa apologised for the problems facing the firm, but said he did not foresee a need for any dramatic revisions in the earnings report.

He called the auditor’s decision not to approve it ‘truly regrettable’ and said he hoped the company would not be delisted.

Toshiba has seen its earnings hit by swelling costs linked to the Fukushima Daiichi nuclear plant, which sank into multiple meltdowns after the 2011 tsunami in north-eastern Japan.

A declining appetite for nuclear power, has also taken its toll on the company.

Toshiba’s reputation had been earlier tarnished by a scandal over doctoring of accounts to meet unrealistic profit targets.