Toshiba books 2014 loss on charges, restates previous profit

 Toshiba posted a net loss of 37.8 billion yen (S$452 million) in the 12 months ended March.
Toshiba posted a net loss of 37.8 billion yen (S$452 million) in the 12 months ended March.PHOTO: AFP

TOKYO (BLOOMBERG) - Toshiba Corp. posted an annual loss and restated earnings for the previous six years as it tries to recover from an accounting scandal that led to the ouster of its president and two predecessors.

Shares rose.

The net loss was 37.8 billion yen (S$452 million) in the 12 months ended March, compared with revised net income of 60.2 billion yen a year earlier. The Tokyo-based company didn't issue dividend or earnings forecasts for the current year.

Adjustments wiped out net income from businesses that span nuclear reactors, computer memory chips and laptop computers.

The company has revamped its board, apologized to investors and appointed a special committee to try to win back trust and prevent further irregularities.

"The announced fiscal year loss is within the range of what investors have been expecting, so investors are buying back the shares," said Mitsushige Akino, an executive officer at Ichiyoshi Asset Management Co. in Tokyo. "But in the long run, it is unclear how Toshiba will change."

Toshiba rose 1.8 per cent to 352.7 yen as of the close Monday in Tokyo. The shares have dropped 31 percent this year, compared with a 2.7 percent gain for the Topix index.

The company will hold an extraordinary general meeting on Sept. 30, it said.

Writedowns to net income from the years ending March 2009 to March 2014, plus the first three quarters of the next year, totaled 155.2 billion yen, according to the statement.

The biggest was a 64 billion yen reduction in profit for the year to March 2013 to 13.4 billion yen.

Toshiba's "creditworthiness remains under strong downward pressure," Ratings and Investment Information Inc., said in a report Monday. "Close attention should also be paid to whether the company is able to improve other low-margin businesses such as consumer electronics, for which it has already embarked on structural reforms."

Toshiba's probability of debt non-payment within one year has climbed to 0.38 per cent from about 0.11 per cent in early May before the accounting irregularities were first reported, according to the Bloomberg default-risk model, which considers factors such as share prices and debt levels.

The gauge suggests the utility's credit rating has dropped to the lowest investment grade from the third-lowest level. Standard & Poor's cut its outlook on Toshiba's BBB bond rating to "negative" from "stable" on July 21. That's the second-lowest investment grade.