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Toshiba says 'not ready,' delays earnings, nuclear writedown

Reuters with CNBC.com
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Toshiba has unexpectedly delayed the release of its quarterly earnings and details of a multi-billion dollar writedown to its nuclear business, sending its shares sharply lower as investors fret over the conglomerate's future.

Toshiba had said it would reveal the charge at noon (0300 GMT), along with its latest outlook. But it later said in emailed statement that it was "not ready", giving no further details.

Kyodo news agency, citing a financial source, said the delay was due to problems in Toshiba's discussions with auditors.

"The delay shows that the company is in a mess," said Makoto Kikuchi, chief executive of Myojo Asset Management.

"We can assume that the company is not delaying its earnings release for good news. The market speculates that Toshiba will be releasing figures worse than what is being reported already."

Toshiba shares finished around 8 percent lower Thursday and Chairman Shigenori Shiga also announced he was stepping down.


The cost of insuring against a Toshiba credit default climbed, with the most actively traded credit default swaps jumping 30 basis points to 357/399 bps. That means it would cost $357,000 to $399,000 per year for five years to insure $10 million in bonds.

Toshiba's share price could fall much further: Expert
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Toshiba's share price could fall much further: Expert

Toshiba has not given a fresh timing for its release. Beyond Tuesday, it would have to seek an earnings deadline extension from regulators. It could under securities laws rules be placed under supervision for possible delisting.

The company twice delayed planned earnings releases in 2015 as it wrestled with the fallout from its $1.3 billion accounting scandal.

A spokeswoman for the company said it may also push back a planned 1600 (0700GMT) press conference where Chief Executive Satoshi Tsunakawa was expected to outline the prospects for Toshiba's nuclear arm and update on efforts to raise capital, including the sale of a stake in its memory chip business in Tokyo.

Toshiba warned of a potential writedown in December. Sources familiar with the matter say the charge will be as high as 700 billion yen ($6.2 billion) - a sum that would wipe out the group's shareholder equity.

Japan's Nikkei business daily reported on Tuesday that the TVs-to-construction conglomerate would warn alongside its quarterly earnings that its future is unclear.

Toshiba may also sell an interest in British nuclear venture NuGeneration to Korea Electric Power Corp (Kepco) , the newspaper said.

Reuters reported earlier this month that Toshiba was seeking at least a partial exit from the venture.

Asked about the Nikkei report, a Toshiba spokesman earlier declined to comment. A Kepco spokesman declined to comment, as "Toshiba's nuclear business plan has not been crystallized yet."

($1 = 113.7100 yen)

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