Tokyo - Toshiba delayed its fiscal 2014 earnings release, saying further investigation of accounting issues at its US unit caused it to miss the deadline that regulators had set three months ago.
The Japanese industrial group obtained permission from the regional securities regulator to postpone submission of the report due today until September 7, it said in a statement Monday. Toshiba submitted the financial results to its auditor yesterday, it said in a separate statement. President Masashi Muromachi is scheduled to brief reporters at 8 p.m. in Tokyo.
The second delay of earnings, initially due in May, comes after internal and third-party probes of the Japanese industrial group’s accounting led to the resignation of its president and two predecessors and caused at least $1.2 billion in writedowns. Toshiba said Monday it discovered irregularities in percent-of- completion accounting related to a US unit’s construction project.
“One week delay is not such a big deal, but that’s another week of uncertainty,” said Hideki Yasuda, an analyst at Ace Research Institute in Tokyo. “They need to report as soon as possible.”
Toshiba earlier this month had said it expected a net loss for the past year without providing a specific number as costs related to the scandal wiped out profit from Toshiba’s businesses, which 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 at the 140- year-old pillar of Japan Inc.
Operating profit
Toshiba on August 18 forecast operating income of 170 billion yen ($1.4 billion) for the year ended March 2015 and pretax profit of 140 billion yen. The company had scrapped its earnings forecasts in May and announced an investigation of accounting irregularities that was subsequently expanded to cover the entire company.
The company, which has built up holdings in more than 300 affiliates, partners and customers, has said it will sell off some to raise cash.
Toshiba will sell its stake in Topcon Corp. and expects to book a gain of between 30 billion yen and 40 billion yen, it said separately on Monday.
Muromachi was named president after taking the role on an interim basis in July when his three predecessors all quit over the accounting scandal.
Lost trust
Toshiba’s third-party report released on July 21 detailed practices that led to overstatement of profits, linking them to former presidents Hisao Tanaka, Norio Sasaki and Atsutoshi Nishida. Muromachi’s name wasn’t mentioned.
Toshiba also announced board changes this month, increasing the number of independent directors to seven from four. No charges have been filed against Toshiba or its executives.
“The company has completely lost investor trust, since no one had expected things to be this bad,” Yasuaki Kogure, chief investment officer at SBI Asset Management, said prior to the announcement. “We still don’t know whether the new management will change the company and how, and what it will consider as an achievable profit margin.”
BLOOMBERG