Profits Slump at Ricoh, Records Loss for Second Half

Ricoh Billboard Times Square

Ricoh Company of Tokyo, Japan, has reported  financial results for its fiscal quarter that ended on September 30th, with profits declining 85.5 percent to ¥5 billion, versus profits of ¥34.5 billion for the same quarter a year ago. Operating profit was down 70.5 percent to ¥16.5 billion, while sales declined 11.3 percent to ¥971.4 billion, versus ¥1.095 trillion for the same quarter a year ago.

For its third quarter, sales for Ricoh’s Imaging and Solutions group were down 14.4 percent, versus the same quarter a year ago, and made up 87.8 percent of Ricoh’s total sales in its third quarter.

Within its Imaging and Solutions group:

  • Sales for the Office Imaging group were down 14.7 percent.
  • Sales for the Production Printing group were down 16.8 percent.
  • Sales for the Network Solutions group were down 11.9 percent.

First Half of Fiscal Year

For the first half of its fiscal year that ran from April 1 to September 30, 2016, Ricoh recorded a loss of 6.9 billion yen, including a likely loss for its subsidiary in India.

Sales for Ricoh’s half year declined by 11.3 percent compared to the same period a year ago to ¥971.4 billion, mainly, says Ricoh, due to the decline in sales in both its Imaging and Solutions group and its Industrial Products segment. It also says that the appreciation of the yen was a factor in declining sales, and that sales would have declined by 2.9 percent when the effects of exchange-rates are taken into consideration.

As for the overseas market, the firm says the U.S. economy continued to show “a solid recovery,” but the “European economy remains uncertain with the Brexit. China and other developing countries in Asia are showing signs of an economic slowdown.” Under such market conditions, Ricoh’s Other segment’s sales increased, but was offset by declining sales in its Imaging  and Solutions segment and its Industrial Products segment.

Gross profit decreased by 13.3 percent as compared to the previous corresponding period, to ¥387.2 billion, mainly due to the decrease in sales, and operating profit decreased by 70.5 percent as compared to the previous corresponding period, to ¥16.5 billion.

First Half of Fiscal Year by Business Segment

Imaging and Solutions Group

Office Imaging: Sales declined by 13.5 percent to ¥615.1 billion. The firm says that “on top of the impact of the strengthening of the yen,” MFP sales declined in the Americas. As a result, sales in this category declined as compared to the previous corresponding period.

Production Printing: Sales declined by 11.9 percent to ¥95.3 billion. Sales of related parts and supplies, and service for color cut-sheet printers in both domestic and overseas markets increased, but was offset by the impact of the strengthening of the yen.

Network System Solutions: Sales declined by 8.6 percent to ¥144.9 billion. In Ricoh’s domestic Japan market, IT-product sales increased. In its overseas markets, IT-product services increased in the Americas and Europe, but was offset by a sales declined in Ricoh’s Other region, which includes India.

As a result, overall sales in the Imaging and Solutions segment declined by 12.5 percent as compared to the previous corresponding period, to ¥855.3 billion. Operating profit declined by 54.9 percent as compared to the previous corresponding period, to ¥35.4 billion mainly, states Ricoh due to the decrease in sales and related costs of its sales subsidiary in India.

Industrial Products

Sales in Ricoh’s Industrial Products segment declined by 6.7 percent to ¥59.1 billion as compared to the previous corresponding period, which, according to Ricoh, was due to the impact of the strengthening of the yen and a declines in sales for its Thermal business.

In spite of positive factors such as the effect of Ricoh’s cost reductions, operating profit in the Industrial Product segment declined by 26.7 percent as compared to the previous corresponding period, to ¥4.4 billion.

Other Segment

Sales in Ricoh’s Other segment increased by 6.0 percent as compared to the previous corresponding period, to ¥56.9 billion, due, states Ricoh, to the increase in income and profit in its leasing and camera businesses. As a result, operating profit for its Other segment increased by 104.0 percent as compared to the previous corresponding period, to ¥2.6 billion.

Forecast

For its fiscal year that will end on March 31, 2017, Ricoh projects net income of 18 billion yen, or 24.83 yen per share, down 71.4 percent from the previous year. Sales for the year are expected to be 2.01 trillion yen, down 9 percent.

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