The nuke biz is going down like dominoes. Hitachi announces a nearly $6.2 billion loss on its U.S. uranium enrichment joint effort with GE.
Electronics giant Hitachi Ltd. is set to lose tens of billions of yen this fiscal year due to the withdrawal from a project to develop a new method of uranium enrichment by a joint venture in the United States.
The loss, forecast by Hitachi on Feb. 1, was disclosed shortly after Toshiba Corp. made a similar announcement last month of deficits brought on by its nuclear power business.
Hitachi is expected to report a 70 billion yen ($620 million) non-operating loss by the time books are closed for fiscal 2016 at the end of March, said Mitsuaki Nishiyama, a senior vice president of the Tokyo-based conglomerate, in a news conference on the company’s performance through the third quarter.
The deficit is largely attributed to the joint venture GE Hitachi Nuclear Energy Inc. withdrawing from the uranium enrichment project. Due to this decision, Hitachi no longer expects any profits from the North Carolina-based company, of which it owns 40 percent and the rest by General Electric.
After allocating the losses, the value of Hitachi’s share of the joint venture comes to only about 11 billion yen.
Despite the gloomy news, Nishiyama said that “there are no more large deficit risks.”
Hitachi and GE were expecting more nuclear power plants to be built when they launched the joint fuel enrichment business, but orders have been sluggish across the globe, forcing the project to be shelved.
Nevertheless, Hitachi will be sticking with its nuclear power business. The company said that it plans to proceed with its project to build a plant in Britain by ensuring costs are thoroughly managed.