Toshiba faces more billion-dollar writedowns over nuclear reactor business
Cost overruns and inefficiencies have dogged nuclear reactor projects around the world.
Less than 18 months after a billion-dollar accounting scandal, Japanese technology giant Toshiba is facing a further meltdown over its nuclear investments.
Toshiba lost a fifth of its market value on Wednesday and its stock fell another 15% yesterday in Tokyo as panicked investors rushed to sell shares.
It was poised to benefit from a nuclear power revival when it paid $US5.4 billion to win a bidding war for Westinghouse Electric in 2006.
But cost overruns and missed deadlines have dogged nuclear-reactor projects around the world. Toshiba chief executive Satoshi Tsunakawa says the problems will force the company to take a writedown estimated at several billion dollars.
Toshiba shares had surged since February on optimism about its semiconductor business and expectations for solid profit in the fiscal year ending March 2017.
Until recently, Westinghouse was regarded as the industry’s front-runner – the only nuclear supplier to have landed contracts for its next-generation reactor in both the US and China.
But a series of missteps and unexpected problems have snarled nuclear projects by Westinghouse and rivals including Areva and General Electric.
Reactor projects delayed
Some 54 reactors are under construction in 13 nations and 33 are badly delayed, according to the World Nuclear Industry Status Report.
To lower costs and speed construction times, Westinghouse and its competitors relied on plant designs that meant sections could be built as modules in factories and then hauled to sites for final assembly.
But the strategy appears to have backfired with basic problems in quality control and replicated plans repeating undetected design flaws.
Toshiba says it has discovered unexpected inefficiencies in the labour force at a subsidiary working on reactor projects in Georgia and South Carolina.
The lack of skilled workers made it hard to maintain quality control and tap a global supply chain that is required to meet rigorous standards of nuclear regulators.
Toshiba has eight reactors projects under way in the US and China.
The company is on a Tokyo Stock Exchange watchlist because of the accounting scandal that forced it to take a $US1.3 billion writedown for its nuclear business in November 2015.
Nevil Gibson
Fri, 30 Dec 2016
Fri, 30 Dec 2016
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Toshiba faces more billion-dollar writedowns over nuclear reactor business
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