Fueled by Cost-Cutting, Ricoh Reports Sales and Profits up for Nine-Month Period

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Last week, Ricoh Company of Japan reported that sales for the nine-month period ending December 31, 2017 increased by 3.2 percent as compared to the previous corresponding period, to ¥1,516.2 billion. Sales in all segments, except Ricoh’s Office Printing segment, increased. As a result, profits increased by 321.4 percent as compared to the previous corresponding period, to ¥17.3 billion.

Sales generally increased mainly in the Office Service segment and Industrial Printing segment, but sales in the Office Printing segment declined As for overseas sales by region, sales in the Americas decreased by 2.7 percent, while sales in Europe, the Middle-East, and Africa increased by 4.0 percent, and sales in the Other region, which includes China, South East Asia, and Oceania, increased by 9.0 percent.

As a result, sales in the overseas market increased by 1.6 percent as compared to the previous corresponding period.

Ricoh’s Selling, general, and administrative (SGA) expenses declined by 0.2 percent as compared to the previous corresponding period, to ¥558.1 billion. Though there was an increase of costs relating to structural reforms for future business growth, Ricoh says that the effects of continuous group-wide activities to reduce costs have contributed in controlling these expenses.

Other income increased as compared to the previous corresponding period due to increased sales of contracts by transferring customers who are provided direct sales and service from Ricoh group to each region’s distributors in the Americas as a part of Ricoh’s optimization of direct and indirect sales channels.

As a result, operating profit for Ricoh in the nine-month period increased by 68.1 percent as compared to the previous corresponding period, to ¥48.0 billion. Profit before income tax expenses increased by 65.0 percent as compared to the previous corresponding period, to ¥43.1 billion.

As a result, profits increased by 321.4 percent as compared to the previous corresponding period, to ¥17.3 billion. Comprehensive income increased by 461.6 percent as compared to the previous corresponding period, to ¥67.6 billion

Review by Segment

Office Printing

Sales in the Office Printing segment declined by 1.0 percent to ¥849.2 billion as compared to the previous corresponding period. Sale prices were suppressed, mainly due to the adjustment of prices that focused on profitability, but gross profit declined with the sales amount’s decline. SGA expenses declined, mainly due to the effects of continuous group-wide activities to reduce costs.

As a result, operating profit in the Office Printing segment increased by 9.9 percent as compared to the previous corresponding period, to ¥88.5 billion.

Office Service

Sales in the Office Service segment increased by 8.0 percent to ¥317.5 billion as compared to the previous corresponding period. IT products and communication services increased mainly in the domestic (Japan) market.

As a result, Ricoh’s operating loss for its Office Service segment declined by ¥3.1 billion as compared to the previous corresponding period to ¥3.0 billion of loss. Ricoh’s operating profit  – a loss – for the previous corresponding period was  ¥6.1 billion.

Commercial Printing

Sales in the Commercial Printing segment increased by 3.3 percent to ¥137.7 billion as compared to the previous corresponding period, due to the increase in sales of color cut-sheet printers related parts and supplies due to an increase of the amount of color cut-sheet printers in the field.

As a result, operating profit in the Commercial Printing segment increased by 111.4 percent as compared to the previous corresponding period, to ¥19.9 billion.

Industrial Printing

Sales in Ricoh’s Industrial Printing segment increased by 64.4 percent to ¥13.4 billion as compared to the previous corresponding period.

Sales of Inkjet print heads were in “good …shape,” mainly in Ricoh’s overseas market.

As a result, Ricoh’s operating loss for its Industrial Printing segment declined by ¥0.8 billion as compared to the previous corresponding period, to ¥1.7 billion of loss. Ricoh’s operating profit – a loss – for the previous corresponding period was ¥2.6 billion for the Industrial Printing segment.

Thermal Media

Sales in the Thermal Media segment increased by 8.2 percent to ¥46.2 billion as compared to the previous corresponding period. Sales increased mainly in the Americas and Europe. As a result, operating profit in the Thermal Media segment declined by 5.9 percent as compared to the previous corresponding period, to ¥4.6 billion due to the development of new products and an increase of sales expenses.

Other

Sales in the Other segment increased by 14.3 percent to ¥151.8 billion as compared to the previous corresponding period. Though income and profit in optical equipment business mainly increased, it was offset by the decline in income and profit for Ricoh’s camera business, due to the decline in Ricoh’s sales of digital cameras.

As a result, operating profit in the Other segment declined by 13.0 percent as compared to the previous corresponding period, to ¥5.7 billion.

Revised Forecast

Ricoh revised its forecast that it had released last week. For its current fiscal year that will end on March 31, 2018, it increased its forecast because it expects operating profit and pre-tax profit to exceed expectations, given the decline of its SGA expenses made possible by cost-cutting.

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