Toshiba shares dive 20% after it flags one-off loss of "several billion dollars"

Tokyo - Toshiba shares dived more than 20 per cent Wednesday, its second straight double-digit plunge, as the company said it may book a one-time loss of several billion dollars over its US nuclear business.

Toshiba's stock price dropped by 20.42 per cent to 311.60 yen (S$3.84), the largest fall allowed for a single day, about 30 minutes after the opening bell.

On Tuesday, the Tokyo-based conglomerate said in a statement that costs linked to the acquisition last year by its US subsidiary of a nuclear service company will possibly come to "several billion US dollars, resulting in a negative impact on

Toshiba's financial results". The exact figure of the potential write-down is still being worked out, Toshiba President Satoshi Tsunakawa told reporters after the announcement, apologising for "causing concern". He answered in the affirmative when asked if

Toshiba is considering boosting capital. The announcement came after Toshiba shares closed nearly 12 per cent lower on Tuesday after media reports about the potential loss.

Toshiba said the possible loss was related to the valuation of the purchase by subsidiary Westinghouse Electric of the nuclear construction and services business of Chicago Bridge & Iron. Westinghouse and Chicago Bridge & Iron have turned to an independent accountant to resolve a dispute over differences in asset valuations,

Toshiba said earlier this year. "Westinghouse has found that the cost... will far surpass the original estimates" of US$87 million (S$126 million),

Toshiba said, adding that will result "in (a) far lower asset value than originally determined". As a result, Westinghouse and Toshiba may both book one-time losses for this fiscal year ending March 2017, it said, adding it will release a revised earnings forecast as soon as possible.

Toshiba is currently expecting an annual net profit of 145 billion yen (S$1.80 billion), up 45 per cent from an earlier estimate, on sales of 5.4 trillion yen.

The announcement is the latest blow to Toshiba, a once-proud pillar of corporate Japan. It has been besieged by problems, most notably a profit-padding scandal in which bosses for years systematically pushed subordinates to cover up weak financial results.

In an intensive overhaul, the company has been shedding businesses and announced the sale of its medical devices unit to camera and office equipment maker Canon.

Investors had welcomed the makeover, with Toshiba shares having climbed 77.3 per cent this year through Monday. Tsunakawa was appointed president earlier this year to steer Toshiba past the accounting scandal that has hammered its reputation.